This Is The Recovery

Now that the so-called expert analysts have run out of superlatives, they don’t know what to think about real estate – this HW article refers to “housing desolation”.

But this is the recovery.

Mission accomplished, we’re here, it’s done.  The ‘market’ will be on choppy seas for years to come, and people can either participate, or grab some popcorn and watch.

We’ll have more financial calamity and hysteria, but we’ve become accustomed to it by now.  When Greece goes under, will anyone in NSDCC care?  I don’t think the FedGov will stop throwing money at the USA (especially Fannie/Freddie), so short of a domestic revolution, this is it – at least until somebody with vision steps up to the microphone and demands market clearing.

From HW:


As the housing market exits its typical buying season, it faces what many analysts predict to be several months of an ongoing search for a bottom and many years of slow recovery unless bold action is taken now.

Moody’s Investors Service lowered its near-term outlook for housing and the broader economy this week. Home sales and starts are now hitting a bottom, while home prices will continue to sink until early 2012, said Celia Chen, senior director at Moody’s Analytics in a research note.

“As 2011 began, the recovery appeared healthy and ready to turn into a self-sustaining expansion. Job growth was strong, unemployment was falling, and income and consumer spending were accelerating,” Chen said. “Today, the economy is struggling to avoid another recession.”

Recent housing indicators remained stable over the last three months. Housing starts averaged 590,000 units, house prices were flat, according to the National Association of Realtors and CoreLogic indices. But all data were down from last year and should only show minimal gains by the end of 2011.

Chen expects existing home sales will reach a 5.3 million annualized pace, and housing starts will touch 640,000. Next year, she said sales should reach a 6.5 million pace and housing starts could hit 1 million.

Of the bankers surveyed by analysts at the consumer credit firm FICO and the Professional Risk Managers International Association more than half do not expect home prices to climb back to 2007 levels before 2020.

“Have we finally hit rock bottom? That’s hard to say, but according to our survey, it’ll be quite some time before prices fully recover. The fact is that the market needs help to clear the backlog of distressed properties,” researchers said. “We are in no man’s land right now.”

Both Chen and the surveyors said the most obvious policy step to take would be the new refinancing package the Obama administration is currently putting together. Most believe the upcoming changes will simply be a tweak of the underwhelming Home Affordable Refinance Program.

“Economic logic strongly favors action to promote refinancing. With current mortgage rates near 4% and the median rate on outstanding mortgages above 5.75%, the potential rate reduction could average almost 175 basis points,” Chen said, adding that the savings to borrowers could be around $63 billion a year, though estimates vary wildly.

Chen also pointed out that the estimated 2012 bottom to home prices hinges on a restarted foreclosure process very soon, and that depends on how quickly the attorneys general and the banks resolve their differences in the robo-signing talks.

The FICO and PRMIA surveyors agreed.

“Something bold has to happen – either an acceleration of foreclosures that will force prices down to clear the market, or the adoption of aggressive policies that encourage the resetting of loan terms, such as the proposed expansion of the number of homeowners that qualify for refinancing,” they said.

Haves, and Havenots….Again

From msnbc.com:

NEW YORK – It’s starting to feel as if there are two housing markets. One for the rich — and international buyers — and one for everyone else.

Consider foreclosure-ravaged Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 — about what a buyer would have paid during the Great Depression.

Yet just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multimillion-dollar mansions are selling quickly. Sales this August were up 21% from the previous year. The country club has ended its stealth discounts on new memberships. And Main Street’s retail storefronts are full.

“We’re getting more showings, more offers and more sales,” says Ronnie Keating, a real estate agent with Sotheby’s International.

Think of this housing market as bipolar. In the luxury sector, the recession is a memory; sales and prices are rising. Everywhere else, the market is moving sideways or getting worse.


Redfin Scouting Reports

Redfin is doing all the things that the association of realtors should be doing – if they start their own MLS they could take over the industry. 

Hat tip to CM for sending this along, from the nytimes.com:

The real estate listing and brokerage site Redfin has added a tool that gives home sellers access to details about the performance of real estate agents in more than a dozen major markets.

The move continues the continuing Internet shake-up of the real estate world. Web sites like Trulia and Zillow, and local and regional players like streeteasy.com in the New York and New Jersey area, have empowered consumers by putting electronic information about sales and home values at their fingertips. Redfin says it is going a step further, by providing sales data linked to individual agents, to help sellers select a professional to market their home.

The tool can help sellers find agents who are active and who have had success in their specific neighborhood, said Glenn Kelman, Redfin’s chief executive. Using information from local multiple-listing services, where agents list the home they are representing for sale, the “Scouting Report” tool provides data on roughly one million agents, he said.

The tool isn’t comprehensive.

Various M.L.S. restrictions mean the data isn’t available in Redfin’s hometown of Seattle, for instance, nor in Palm Springs, Calif.; parts of Atlanta; California’s wine country; and Westchester County, in New York.

And because the data goes back three years at the most — a period when home sales have been slow — some agents may show no deals at all when you search by their name. But even so, Redfin is going beyond what has generally been available to consumers online, Mr. Kelman said. “Our goal in releasing this information is to help consumers make informed choices about which real estate agent to choose.”

In markets where the tool works, sellers can search for agents by name and see their current listings; how many homes the agent has sold in the last three years, or in the past year in some cases; where the homes are located on a map; photos of the homes; the median sales price; the average number of price cuts for each property; and other details.

Scouting information is available for the following markets served by Redfin: Phoenix; Portland, Ore.; San Francisco and the Bay Area; Sacramento, San Diego and Los Angeles; Chicago; Long Island, N.Y.; Austin and Dallas; parts of Atlanta; Boston; Washington, D.C.; Denver; and Las Vegas.

The tool provides information about all agents in many of the markets, Mr. Kelman said, not just those who work directly for Redfin or who partner with it. (Partner agents work for other firms, but agree to offer commission discounts to Redfin clients.) Some markets offer information on all agents, even if they have no affiliation with Redfin.

Mr. Kelman says M.L.S. data is generally accurate and up to date, but if an agent finds inaccuracies, the site outlines a procedure to have the information corrected.

“I think the best real estate agents are going to love this,” he said.

Runway Extension at Palomar

Hat tip to AL for sending this along, from the nctimes.com:

Plans for a $767,000 runway study at McClellan-Palomar Airport in Carlsbad were cleared for takeoff Wednesday morning, starting a 15-month process to determine whether a runway extension can be built on top of an old city dump.

The San Diego County Board of Supervisors OK’d funding for the study after a short discussion at their downtown San Diego meeting. The county owns the airport.

None of the county’s general fund (used for everything from potholes to patrol cars) will be tapped for the study. Instead, revenue from leases on county airport property will pay for it, officials said.

The desire for a longer runway has gained speed in recent years as McClellan-Palomar has transformed into a busy hub for private and corporate planes. That growth has been followed by several plane crashes in which pilots overshot the airport’s runway.

Airport officials say a runway extension would boost safety and reduce airplane noise for nearby residents. Early plans call for adding 1,100 feet to the 4,897-foot runway.

With a longer runway, planes would be higher off the ground once they leave the airport, reducing the noise heard in the neighborhoods below, Peter Drinkwater, the county’s airports director, said last week.

Supervisor Bill Horn, who represents Carlsbad, said in a statement after the meeting that a longer runway would bolster safety and create “additional opportunities for commuters and corporate jet-setters.”

“This is all about creating jobs and increasing business in North County,” Horn said. “It is time we find out what the true potential of the Palomar Airport is.”

Regarding the study’s hefty price tag, Supervisor Pam Slater-Price said by phone after the meeting: “I think it’s a complicated project and it has to be done right. We have to allocate the appropriate amount.”

She expressed concern about building on top of a landfill, noting several underground fires have burned inside the covered dump in the past. She said she was confident, however, that the concerns would be addressed in the study.

Slater-Price added that Carlsbad Mayor Matt Hall spoke in favor of the study. No one spoke in opposition, she said.

Kimley-Horn and Associates Inc., a national transportation consulting firm, will conduct the study, according to the county.

If at any point during the study an extension is determined not feasible, the study can be terminated with the county retaining all remaining funds, officials said.


California Dreamin’

Remember Dave from Arkansas and his dream list? 

He has a sense of humor, but he is serious about moving to California!  He used Google Maps to scour the coast for view homes, so when they arrived we started with his Pacific Beach list:

NSDCC Defaulter Counts

With the MSM still peppering us about the size of the shadow inventory, Ed asked today for a summary of the local SFR backlog of defaulters.

Included on the right side is the total number of detached MLS sales over the last 12 months so you can gauge how many years it might take to clear out the shadow:

Town or Area Zip Code NOD NOT MLS sales, last 12 months
Cardiff 92007 6 19
Carlsbad NW 92008 24 42
Carlsbad SE 92009 60 94
Carlsbad 92010 22 32
Carlsbad SW 92011 21 34
Del Mar 92014 19 26
Encinitas 92024 56 72
La Jolla 92037 29 39
RSF 67+91 16 37
Solana Bch 92075 13 26
Carmel Vly 92130 33 60
Totals NSDCC 299 481

We’ll expect that a couple of these folks will get their loan mod, a few others will get their yearly bonus, gift or inheritance to get current, and some will get gifts from the FedGov – see below.

P.S. For comparison, during the previous 12 months, there were 2,541 SFR sales on the MLS, while the tax credit was in full swing.

From HW:

The Federal Reserve’s policy of keeping interest rates low to spur lending hit a barrier in the recovery with home prices falling and underwriting guidelines keeping borrowers from refinancing, said Eric Rosengren, president of the Federal Reserve Bank of Boston.

With that in mind, the Fed Bank CEO said he supports policies that would allow homeowners who are underwater on their mortgages to refinance their loans. “Clearly getting more money into the hands of homeowners who spend it could help to fuel GDP growth,” he said. “This would reduce one of the impediments to a more significant effect from the monetary policy actions taken to date.”

FHA – No Waiting

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!

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