Median vs. Average Price

by | Jun 10, 2011 | Market Conditions, North County Coastal | 35 comments

An excerpt from the sddt.com:

Alan Nevin, director of research at MarketPointe Realty Advisors, noted that the average and median home prices in the county have stabilized.

“However, when the median is substantially different than the average, then there’s something wrong in the market,” he said. “Because, in a strong market the median and average should be very close. Here we’re showing a differential of over $100,000.”

Data from the S&P/Case-Shiller Home Price Indices released on May 31, which more closely measures changes in home values, showed that San Diego homes in March had depreciated 0.8 percent on a monthly basis, and 4 percent on an annual basis.

“We’re basically doing better than the other 18” cities measured by the Case-Shiller Indices, he said.

Through the first five months of the year, total home sales in the county have declined 7 percent to 12,476. Over the same period, total foreclosures in the county have declined by 11 percent, to 5,416.

Since foreclosed homes represent such a large percentage of the current for-sale inventory, Nevin said it’s noteworthy that sales activity has held up to a more pronounced decrease in foreclosure activity.

“It’s showing that when you factor in the major decline in distressed sales, that is basically showing that the market is really strengthening, if they can do almost the same volume with fewer distressed sales,” he said. “That’s an indication that there’s life out there.

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Alan said that in a ‘strong’ market, the median and average sales prices should be very close.

 

For the 470 NSDCC detached sales between April 1st and May 31st:

Median SP: $854,000

Average SP: $1,086,723

 

For the 385 NSDCC detached sales between April 1st and May 31st under $1,500,000:

Median SP: $771,419

Average SP: $808,964

 

When you take out the 85 homes that sold over $1,500,000 (in two months, a strong signal in itself!), the median and average are pretty close.  It’s been a strong market around here lately – will it hold up?

SD Loan Broker Sued

by | Jun 9, 2011 | Mortgage Lawsuits | 8 comments

Hat tip to Kingside for sending this along, from Bloomberg.com:

The U.S. Federal Deposit Insurance Corp., receiver for Downey Savings & Loan Association, sued Amerifund Financial Inc. and affiliated individuals in federal court seeking more than $1 million in damages.

The FDIC alleges breach of contract, professional negligence and civil fraud in the complaint against Amerifund, a mortgage broker, filed June 3 in U.S. District Court in Santa Ana, California.

Amerifund, based in Spring Valley, California, and its agents, processing mortgages for Downey in 2004 and 2005, “caused borrowers’ financial statements to be altered or misstated” in loan applications, the FDIC said. Had true income and debts been disclosed, borrowers wouldn’t have qualified for Downey loans, according to the complaint.

Downey Financial Corp., the S&L’s parent, sought Chapter 7 liquidation in U.S. Bankruptcy Court in Wilmington, Delaware, in 2008, citing as much as $50 million in assets and $500 million in debts. U.S. Bancorp subsequently acquired Downey.

Amerifund’s phone number was not in service today and company owner Eric M. Anderson couldn’t immediately be located for comment.

The case is Federal Deposit Insurance Corp. v. Amerifund Financial Inc., 11CV840, U.S. District Court, Central District of California (Santa Ana).

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We are familar with Amerifund, and they are small potatoes – just a handful of guys running a little shop out of Spring Valley.

But this lawsuit sounds like they’ve been accused of doing what virtually every mortgage broker was doing to obtain “liar loans” – are the feds going to prosecute other mortgage brokers too? 

What about the big fish!!??

The Big Squishdown

by | Jun 9, 2011 | Market Conditions, North County Coastal, Thinking of Buying?, Thinking of Selling? | 16 comments

Robert Shiller was quoted in this Reuters’ article today; here are excerpts:

“My gut feeling is we might see a continuation of the decline” in home prices, Shiller said earlier Thursday at a Standard & Poor’s housing summit.  He added that a 10 percent to 25 percent slump in real home prices “wouldn’t surprise me at all,” though he cautioned that was not a forecast.

Shiller pointed to the glut of unsold homes on the market and the large amount of homeowners under water on their mortgages as pressuring prices.  As for when home prices might bottom, Shiller told Insider that was unclear and it was possible prices could slide for 20 years.

“We’ve seen five years of decline already since the peak in 2006 and I don’t see evidence that we’re coming out of it,” he said.

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I think he’s right about the national stats being on the decline for years to come.

It’s due to people downsizing, and it has multiple fronts:

  • The elderly going off to the ‘home’.
  • Seniors in two-story homes who are trying to give up the stairs – and re-establish savings.
  • Middle-age families who are being more fiscally conservative with all their choices + savings.
  • First-timers and investors preferring the cheaper stock.

These forces working together should cause the typical statistics to show a surge in lower-priced homes, while the higher-end struggles. 

But there are more parts of the puzzle.  What’s occuring is a re-shuffling of all housing priorites. 

Examples of buyers re-sorting their housing priorites:

  1. Multi-generational – elderly who buy a new home with their kids who help them to the finish line.
  2. Older folks who sell a long-time residence in the more- expensive coastal areas, then buy a home in the upper price ranges of a smaller town – and still bank some money.
  3. First-timers moving further out to spend less money, but get more value.

These are examples I’ve seen just this week, but it makes sense that as long as you’re moving, you might as well look hard at every component.  Improving the quality of life seems to be the biggest priority – for many that’ll hopefully mean that they move to, or stay in San Diego!

As a result, while we will probably see national statistics reflect more downward trends, the best-quality areas could dodge the bullet.

“Spring Kick” Measurement

by | Jun 9, 2011 | Market Conditions, North County Coastal, Sales and Price Check, Spring Kick, Thinking of Buying?, Thinking of Selling? | 10 comments

How is that spring selling season coming along?

North San Diego County Coastal detached sales and pricing, January through May (5 months):

Year # of Sales Avg. $/sf
2000
1,377
$268
2001
1,117
$289
2002
1,568
$292
2003
1,411
$330
2004
1,380
$427
2005
1,244
$472
2006
1,109
$487
2007
1,120
$456
2008
814
$457
2009
696
$399
2010
975
$382
2011
1,021
$374

The ez-qual, no money down loans up to $1.5 million finally stopped in the summer of 2007, so the best comparison is between the last four years.

Lately the momentum has started to wane, and those attempting to sell need to adjust their price if they think they are going to get out this summer:

OCAR vs. IHB

by | Jun 8, 2011 | Scams | 19 comments

Hat tip to the three people who sent this in – from the ocregister:

The Orange County Association of Realtors has filed a grievance against an Irvine real estate broker who writes a blog that takes critical looks at the housing crash, homebuyers and real estate agents.

Larry Roberts, who writes the IrvineHousingBlog.com, freely admits going “over the top” in his posts, which are particularly harsh on homeowners who default on loans. He frequently shows MLS photos of properties that have gone into foreclosure. He also has accused real estate agents, in general, of being dishonest.

The grievance says Roberts and two other people have violated a code of ethics rule stating that “Realtors must not knowingly lie about competitors” as well as a general set of regulations governing how MLS information is used on the Internet.

Roberts says OCAR is trying to impinge on his freedom of speech, and that the organization has no standing to keep him from posting on his blog.

He has a broker’s license, he says, but he doesn’t run a brokerage or sell real estate, and he is not a Realtor or a member of OCAR.

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Stop right there.

The OCAR has no jurisdiction over Larry – he isn’t part of their club.

Here is Larry’s response: Link

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The associations of realtors are a joke.  From NAR on down to the local clubs, they provide no real help to agents, other than offering a convenient location to buy forms and open house signs.

The MLS is a separate enterprise owned by the associations, but nobody insists on excellence – it’s just a standard internet format that is slightly upgraded from the 1995 version.

Every year they ask the agents for suggestions, to which I always respond – but nothing changes.

The Houston Association of Realtors is the leader.  They publicize their realtors, and allow them to post their blogs and other websites on their listings.   The HAR has done this for years, yet it hasn’t caught on here.  The San Diego MLS still forbids you from including youtube tours for public consumption.

If an association really wanted to do some good, they’d enforce the existing rules, and/or create clear-cut guidelines on things like short-sales.  But their idea of enforcement is busting my chops for including this in the MLS remarks, at the request of the seller:

Property has been assigned to an auction house. Pre-auction offers are being accepted online and Auction House said they will respond within 48-72 hours. Note Pre-Auction Worksheet Attachment.

They sent me a warning while I was on that Washington D.C. trip, and I thought I’d handle it when I got back.  But that was too late, they fined me $150 the following Monday.

There is a great opportunity for any association of realtors to take the lead with defining short-sale procedures, because the uncertainty is making participants brazen in their approach. 

For those of you who didn’t see the exchange yesterday, a couple of posts back we got into it again over what is right and wrong.  Check the 38 comments here.

Once somebody creates a public MLS, there won’t be any reason for the association of realtors to exist.  I look forward to that day. 

It would clear out approximately 50-80% of the agents, and save the rest of us about $300 per year.

 

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