bubbleinfo.com

From sddt.com:

Add another data point to housing’s ongoing bounce along the market bottom.

Sales activity of existing homes in San Diego County slipped on a monthly basis in October, falling roughly in line with its year-ago level, according to recent data.

The San Diego Association of Realtors (SDAR) reported that buyers purchased 2,292 total homes last month, virtually unchanged from the 2,297 sold last October but down 9 percent from a month earlier.

Of the homes sold in October, 1,546 were single-family homes. The single-family total is 10 percent fewer on a monthly basis but 3 percent above October 2010.

The 746 condos sold last month represented declines of 6 percent from both the previous and year-ago months.

Among single-family homes, the median sales price — measuring only the cost of the median home of all properties sold during the defined period, rather than a broad change in housing values –fell 1.3 percent from September and 7.6 percent from last October, to $355,000.

The median condo sold for $207,500, down 1.1 percent from September and 2.8 percent from last October.

The most pronounced change in the SDAR numbers, on an annual basis, is the average time properties spent on the market last month.  Single-family homes sold in an average of 91 days, 18 percent more than the 77 average days spent on market last year, and 12 percent more than a month earlier.

The for-sale inventory, especially on the low end of the market, has grown picked over as the distressed properties in the best condition are quickly snatched up after going on the market. Making matters worse, sellers who would typically be looking to enter the move-up market have abstained due to low prices and an unstable labor market.

“People go out and they get very discouraged looking at what’s on the market,” said Alan Nevin, principal of The London Group Realty Advisors last week, reached last week to discuss housing affordability in San Diego. “The number of listings of homes under 500 in acceptable areas is negligible.” (I think he means under $500,000)

Russ Valone, president and CEO of MarketPointe Realty Advisors, said the increasing prevalence of short sales might also account for the rising days spent on market average.

The average is calculated from the time a property is listed to the time it closes, not when it enters escrow. The notoriously lengthy transaction timeline of short sales could push up the average, even if other properties aren’t necessarily spending additional time on the market.

(JtR: The paragraph above is inaccurate, the DOM is calculated from listing date to pending date)

Short sales account for roughly 8 percent of all home sales this year, up from 7 percent in 2010, 5.5 percent in 2009 and 3 percent in 2008, according to CoreLogic.

Valone said the increasing share of short sales is also in part responsible for the softness in prices.  “We’ve been bumping along the bottom for a good year,” he said. “Look at housing market, and softness, has little to do with housing, has to do with larger macroeconomics.”

The market needs echo boomers — children of baby boomers — to leave the rental market and become home buyers, according to Valone.

As long as the labor market remains weak, though, they’ve opted for flexibility over building equity.

“People who don’t own now should be coming into the market with zeal, with good interest rates and prices, and instead they’re saying ‘I don’t know if I’ll be full-time employed in San Diego,’ so they want the flexibility that staying in the rental market affords them,” he said.

While some analysts’ predictions have surpassed the general forecast that prices won’t fall more than another few percentage points, and have suggested they could come down as much as another 7 percent, those losses still don’t represent a great deal of money in the long run, according to Valone. More than a fear that values are still on the way down, it’s a fear of the current labor market that’s keeping young would-be buyers on the wrong side of the fence, he said.

“Housing won’t lead us out,” he said. “Instead of it being the lead engine pulling the train, it’ll be in the back pushing the train.”

Through ten months, total home sales have slipped 3 percent from last year, when the homebuyer’s tax credit propped up sales early in the year, led primarily by a decline in condo sales.

County buyers have purchased 8,902 condos this year, down 8.3 percent from the year-ago period’s 9,709.

Meanwhile, 17,565 single-family homes have been sold this year, down less than a percent from last year’s 17,603.

The average days on the market for the entire year among single-family homes has increased 13 percent, from 74 to 84, while condos are now spending an average of 96 days on the market, up 14 percent from 84 during the first 10 months of 2010.

The median sales price of a single-family home sold this year, $368,000, is 4 percent less than the median home’s price last year. In the condo market, the median price has fallen 5 percent to $207,500.

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JtR’s research:

Now that there are so many companies reporting sales and pricing, the numbers tend to vary. 

I don’t know where CoreLogic gets their “8% of sales this year were short sales”.  Of the detached and attached home sales in San Diego County this year, the MLS shows that 21% have been short sales, and 23% have been REO sales.  

San Diego County sales counts for first ten months (1/1 – 10/31)

Hat tip to daytrip for sending this along:

The stench is only the beginning of the damage someone did to the Bay Shore house. Everywhere you turn, something is ruined and Richard and Scott have no idea who did this.

“I hear from my brother, there was a squatter living in the house. (How did he know?) He passed by and saw the lights on the AC going!” Scott said.

The Scotts haven’t lived in the home for two years. Back in 2009 the house slipped into foreclosure so they put it up for sale and moved down south. In the meantime, the home was torn apart. After police scared off the squatters, in came the scammers.

Read the rest of this entry »

Bank of America has rolled out their ‘Cooperative Short Sale’ process, where they pre-approve the homeowner first, and then suggest a list price to the listing agent:

http://realestateagent.bankofamerica.com/content/documents/Cooperative.pdf

They appraise the property prior to listing, “in order to determine the property’s fair market value”, and will work with the agent “to determine a list price so you can market the property effectively”.

Because BofA will obtain approvals in advance from insurers and investors, once a purchase offer is received, they will make a decision within 10 business days.

They also put a hold on the foreclosure process, and give $2,500 relocation assistance to the outgoing homeowner.

One of the biggest problems with short sales is getting the sellers to cooperate.  While this sounds like a full-fledged pursuit of short-sales, will the homeowners be willing to give up the free rent?

When houses all around are selling for high-$700,000s and up, why does a house have to get down to $639,000 before selling?  Last month, two brand-new houses that were virtually the same square footage sold on the same street for $835,000 and $839,000.

I missed this on Sunday, from the U-T: (check comment section)

The nation’s largest banks are luring a select number of San Diego County homeowners to complete short sales with the promise of cash, in some cases as much as $35,000 for each deal.

These incentive offers, which require lenders to accept less than what the borrower owes on their mortgage, have surfaced in recent months locally and around the U.S. As straightforward as they seem, they’ve baffled real estate agents and the courted borrowers, many of whom are jobless, behind on mortgage payments, or facing some other financial hardship.

They wonder: Why are the likes of Chase, Bank of America and Wells Fargo aiding homeowners with lump-sum cash offers? And why are certain homeowners chosen and not others?

Lenders won’t say. But they will divulge this: Don’t bother seeking out the incentives. If you qualify, they will come find you.

“It’s not something people can apply for,” Chase spokesman Gary Kishner told the Union-Tribune in a recent phone interview. “We look at case-by-case situations. Even the amount (offered) is case-by-case.”

Chase, the sole bank that provided a specific timeline, said it unrolled its short-sale incentive program late last year. Efforts were ramped up this year and are “now in full swing,” said Kishner, who declined to say how many homeowners received letters.

Bank of America confirmed it’s also offering incentives for completed short sales for “certain borrower profiles,” and Wells Fargo is doing the same, but the cases are “very situational.”

Read the rest of this entry »

With the taxation of debt relief set to resume in 2013, we should see a mad rush of short-sellers trying to time their departure just right, in order to get max cheese, no tax.  Hat tip to SM for sending this along from the Sun:

Bank of America, the nation’s largest mortgage servicer, is offering Florida homeowners up to $20,000 to short sale their homes rather than letting them linger in foreclosure.

The limited-time offer has received little promotion from the Charlotte, N.C.-based bank, which sent emails to select Florida Realtors earlier this week outlining basic details of the plan.

Only homeowners whose short sales are submitted for approval to Bank of America before Nov. 30 will qualify. The homes must have no offers on them already and the closing must occur before Aug. 31, 2012.

Realtors said the Bank of America plan, which has a minimum payout amount of $5,000, is a genuine incentive to struggling homeowners who may otherwise fall into Florida’s foreclosure abyss.

“I think this is a positive sign that the bank is being creative to try and help homeowners and get things moving,” said Paul Baltrun, who works with real estate and mortgages at the Law Office of Paul A. Krasker in West Palm Beach. “With real estate attorneys handling these cases, you’re talking two, three, four years before there’s going to be a resolution in a foreclosure.”

Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance, called the short sale payout a “bribe.”

“You can call it a relocation fee, but it’s basically a bribe to make sure the borrower leaves the house in good condition and in an orderly fashion,” Cecala said. “It makes good business sense considering you may have to put $20,000 into a foreclosed home to fix it up.”

Homeowners, especially ones who feel cheated by the bank, have been known to steal appliances and other fixtures, or damage the home.

“This might be the banks finally waking up that they can have someone in there with an incentive not to damage the property,” said Realtor Shannon Brink, with Re/Max Prestige Realty in West Palm Beach. “Isn’t it better to have someone taking care of the pool and keeping the air conditioner on?”

A spokesman for Bank of America said the program is being tested in Florida, and if successful, could be expanded to other states.

Read the rest of this entry »

An agent said it yesterday, and I talked to a loan rep who confirmed it.

FHA has expanded their underwriting guidelines for those who have a short sale on their record.

They already allow borrowers to come back three years after a foreclosure or short sale, but now there is an additional option.

People who have short-sold their previous home can now buy their next home immediately, rather than having to wait 2-3 years, as long as:

• They have a legitimate hardship,
• Have made their last 12 months of mortgage payments on time, and
• They ”aren’t taking advantage of the market”, meaning that they aren’t buying a much more-expensive home.

The thought of convincing the existing lender to approve a short sale when the borrower is current on payments sounds a bit daunting, but the loan rep said that they have closed several of these already!

Here’s our next test of the short sale market.

It exemplifies a risk that banks may be considering when deciding how much of the mortgage market they may want, once the government gets out:

Thanks to those who commented on the last post about text vs. videos!

It feels like working in a vaccum at times, because not that many people leave comments (which is fine).  If you have thoughts on the blog material or direction, feel free to comment – I think there are only 50-100 commenters, yet there were over 14,000 unique visitors in the last month!

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Thanks to JP for sending this along:

To help make appraisals more consistent and accurate, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to develop the Uniform Appraisal Dataset (UAD). The UAD will (1) define what fields are required for an appraisal submission and (2) standardize both responses and definitions for certain fields.

Here are just a few of the items impacted by the new appraisal standards:

1. Days on the Market: Days on market is now defined as the total number of continuous days. If a property is taken off the market and then relisted, the appraiser will have to count all of the days it has been listed.
2. Offering Price: The original offering price and history of all price changes must be reported.
3. Property Style: Appraisers must use appropriate architectural design indicators such as “Colonial,” “Farmhouse,” etc. Descriptions such as 1 story, 2 stories, etc are no longer acceptable.
4. Condition of the Subject Property: An overall condition rating must be assigned from the predefined condition categories provided.
5. Quality of Construction: The appraiser must rate the quality of construction of the subject property and all comps using a list of 6 predefined quality levels.

The UAD appraisal standards are required for all appraisals conducted on or after September 1, 2011 for conventional loans sold to Fannie Mae and Freddie Mac.

To read FAQs about the UAD appraisal standards, visit:

https://www.efanniemae.com/sf/lqi/umdp/pdf/uadfaqs.pdf.

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Hopefully the appraisers will be diligent enough to catch the short-sale listing agents who never expose their listings to the open market – because the Sandicor MLS is still complicit in the fraud.  The typical fraud is for the listing agent to immediately mark the property ‘contingent’ in the MLS upon input – but Sandicor’s MLS doesn’t stop the count of days on market until it’s marked pending.  The date the listing is marked contingent is mentioned in the listing history – but will casual appraisers look there?  Or just take the DOM count which is calculated from listing input to pending?  A typical short sale isn’t marked pending until the short sale is approved, which is 1-6 months after listing input.

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Here is how B of A is trying to fight short-sale fraud:

BofA short-sale add and broker cert

It’s a general form that has all parties sign that they aren’t committing fraud, which may not stop them but at least make them think about it before doing so.  The listing agent also has to certify that:

“the subject property has been listed on the local multiple listing service at fair market value to provide open market competitive bids to present to the seller as per the terms of the seller/agent listing agreement, and that the marketing is in fact and ‘in spirit’ seeking to maximize the selling price of the property.”

There will be some agents getting out of the short-sale business if they can’t commit fraud, so I hope more banks crack down like this.