bubbleinfo.com

This youtube video shines the spotlight on Carlsbad’s La Costa Oaks development, one of the four villages subdivided by Morrow Development (La Costa Valley, La Costa Greens, and La Costa Ridge are the others). As with other tracts sold at the peak, there is plenty of noise in the data, challenging buyers to make sense of it.

Southeast Carlsbad’s 92009 zip code is physically about the same size as Carmel Valley’s 92130; 20.2 sq. mi. to 19.7 sq. miles. But 92009 has about 66% more homes than CV, so the foreclosure stats showing them having twice as many NODs and NOTs isn’t that drastic (the stats in video says “Carlsbad”, but they are just the 92009 foreclosure numbers):

The late-reporters will add about 10% to these numbers, but it looks like the overall sales will continue their downward trend.  When you drill down to the individual zip codes, it’s a mixed bag, but good to see 92067 slip under $400/sf for the third time this year. 

Detached sales for August, Year-Over-Year:

From the reoinsider:

Chris Bowden, vice president of the Freddie Mac HomeSteps department, which manages the government sponsored enterprises’ (GSE) REO inventory, said stabilizing neighborhoods will depend on getting first-time homebuyers to buy REO.

In a features perspectives published Tuesday on the Freddie website, Bowden said Freddie’s inventory of REO has tripled over the past two years to more than 62,000 properties. The weight of these properties has had a “significant impact” on home prices in these communities, but selling to owner-occupants can reverse the damage and restore neighborhoods.

“Currently, more than two-thirds of our REO sales are to owner-occupants. Most of our marketing and sales strategies are geared toward attracting owner-occupants, and include incentives for both the real estate agents and prospective homebuyers,” Bowden writes.

The Freddie Mac SmartBuy sales promotion offers owner-occupant buyers a two-year home warranty and closing-cost assistance when they buy a HomeSteps REO. Bowden wrote that its partnership with nonprofit organizations and the federal Neighborhood Stabilization Program (NSP) is putting on auctions targeting first-time homebuyers. In the first one, 200 owner-occupants bought homes in Las Vegas and in Riverside and San Bernardino counties in California. Another 72 owner-occupant buyers purchased homes in the second auction in Phoenix.

In some ZIP Codes, HomeSteps offers REO homes for sale to these owner-occupants through nonprofits before the property is listed for sale on the multiple listing service (MLS). 

But owner-occupants are attracted to properties that have been repaired and restored since the foreclosure. Freddie’s “Good Neighbor” property preservation policies require that the home is “secured, preserved and cleaned” within three business days of the property is deemed vacant. Neighboring properties receive door hangers containing contact information for any interested homebuyers or for someone concerned about the REO in their community.

Approximately 50 percent of the homes that Freddie Mac acquires have occupants – either owners or tenants. In March 2009, they introduced the Freddie Mac Rental Initiative to offer qualified former owner-occupants and tenants month-to-month leases for homes where they live that are now owned by Freddie Mac.

Here is the list of the 338 Freddie-owned properties in SD County – most are somewhat inferior:

FreddiePropertyListAUG10

The sales prices listed are what the previous owner paid, usually about 50% ago.

This will be extremely boring for most viewers, especially those who hate salespeople. If it gets deleted, you’ll know why:

Either sellers and agents are starting to pay attention, or the reach of bubbleinfo is improving, because list prices appear to be coming down nicely - hat tip to RE for sending these in:

OLD CARLSBAD

ENCINITAS

LA JOLLA

PACIFIC BEACH / MISSION BEACH

PT. LOMA

CORONADO

CARMEL VALLEY

The August foreclosure stats, plus examples of houses that went back-to-bene last week:

Will there be a big squishdown from above?

It was noted yesterday that 35% of the active detached SD listings in SD, but only 20% of the sales in the last 30 days are over $700,000.  Are the higher-end sellers who have been on the market for over 90 days motivated enough to dump on price, causing a ripple effect below?

Or will higher-end sellers hold out, either due to high loan balances or high equity positions/low motivations?

Here is a review of the 100 active $1M+ listings in 92009 (23), 92024 (43), and 92130 (34). 

(There just happens to be exactly 100 houses listed today at, or above $1,000,000 that have been on the market for more than 90 days in those three zips.)

The calculations were based on the original loan amounts, unless they looked like a neg-am which then 10% or more was added.  Using the ranges as categories should give us a general feel for the equity positions, and potential for dumping on price. The first category describes the ratio of mortgage balance-to-list price, and if they were on a value range, the low end of the range was used:

Other factoids:

1. Thirty have had no price reductions during their listing.

2. Another 17 have reduced their price less than $100,000.

3. Eight were marked as short sales (some with high balances were not marked)

4. One was an REO listing.

5. At least two were on the foreclosure list.

6. Twenty have been on the market more than 300 days on this listing.

What can we deduce? Only 30% to 40% of the current listings are in immediate trouble (those with less than 20% equity), and that’s only if they need to move for whatever reason. We can guess that the 47 who have loads of equity are likely to cancel unless they really need to move. The in-betweeners will make the difference between more sales at lower prices, or more stagnation. My guess is that less than half of these sellers are motivated enough to lower their price enough to sell.

An example of a buyer who took a lowball shot at a listing that had some tell-tale signs:

1.  A number of other active listings nearby that weren’t selling,

2.  Out-of-town REO listing agent,

3.  A World Savings/Wachovia/Wells Fargo original loan amount of $687,000,

4. A newer tract house that was unattractive enough that it probably wasn’t getting any offers.

It was suggested that the market over $750,000 was “becoming non-existant”, and in yesterday’s seminar, a realtor said that demand in general was ”non-existant”. 

Does a market exist? Let’s look at MLS detached active, actives on market more than 90 days, contingents and pendings, sold-in-last-30-days listings, plus the NODs and NOTS counts:

The under-$500,000 groups are running well under a ratio of 2:1 actives-to-contingents+pendings, which has been a healthy sign in the past. As long as the servicers can keep dripping out the short-sale approvals and loan mods, we could call the lower-end market survivable – though, surprisingly, it’s where the bulk of the defaults are.

The $500,001 to $700,000 market is 2.28:1 on their actives-to-contingents+pendings ratio, and the defaults are well under the number of active listings, so apparently there are elective sellers in this group that could cancel and try again later if they don’t find a buyer. Plus, a few from above should drop into this category to keep everyone hopping.

More than a third of all active listings are priced over $700,000, yet no big rush to the exits with 45% of those languishing on the market for more than 90 days. The low amount of defaults seem to justify the loitering, but with only 77 sales closed in the last 30 days, you have to wonder when sellers and agents are going to figure it out – isn’t it obvious that something is wrong after 90 days and no deal and 80+% of those around you aren’t selling either?

A commenter suggested that the higher-end sellers can’t lower their price, due to loan balance – we’ll review that next.