There is no correlation drawn here between foreclosure flood and the history of rising prices. Given his data, there SHOULD be a foreclosure flood to put banks in a position to profit if history repeats! Fromdsnews.com:
Investors who are eagerly waiting for bargain prices from the potential foreclosure flood are likely waiting for something that won’t happen, according to the September home value forecast report from Pro Teck Valuation Services.
In the report, the company explained why it believes there will be no such flood.
“With regard to the U.S. foreclosure inventory, there has been a misperception that it is a problem for the entire market. In fact, it is quite concentrated in specific cities and neighborhoods,” said Tom O’Grady, CEO of Pro Teck Valuation Services. “For this reason, potential buyers who have been waiting for bargain prices in desirable neighborhoods may be disappointed.”
Instead, the report focused on the current lack of inventory in San Diego, Orange County, and Los Angeles. Overall, Pro Teck found that all three areas have less than 5 months of remaining inventory left.
“This is significant because in the Los Angeles market over the past 25 years, whenever this indicator was below five months, the median price increased by close to 19 percent the following year. Of course, it remains to be seen if the same appreciation happens again,” said O’Grady.
The report also analyzed price per square foot and months of remaining inventory in the three areas and found that the lowest priced areas have the lowest levels of inventory.
The report included a list of the 10 best and worst performing metros based on the company’s market condition ranking model. The list of the top performing markets is based on a several indicators, such as changes in sales, foreclosure sales, prices, and inventory.
The reported noted that one common characteristic of the top markets is they all have experienced significant declines in active listings over the past year.
Top CBSAs
Oxnard-Thousand Oaks-Ventura, California
Seattle-Bellevue-Everett, Washington San Diego-Carlsbad-San Marcos, California
Los Angeles-Long Beach-Glendale, California
Santa Ana-Anaheim-Irvine, California
Houston-Sugar Land-Baytown, Texas
Baltimore-Towson, Maryland
Fort Worth-Arlington, Texas
Austin-Round Rock-San Marcos, Texas
San Antonio-New Braunfels, Texas
Bottom CBSAs
New Haven-Milford, Connecticut
Bridgeport, Stamford, Norwalk, Connecticut
Augusta-Richmond County, Georgia-South Carolina
Rochester, New York
Spokane, Washington
Portland-Vancouver-Hillsborough, Oregon-Washington
New York-White Plains-Wayne, New York-New Jersey
Edison, New Jersey
Nassau-Suffolk, New York
Newark-Union, New Jersey-Pennsylvania
On Wednesday it looked like the detached sales and pricing around NSDCC for September were lagging a bit behind last year’s numbers.
We had quite a flurry the last few days, plus there will be late-reporters adding to this month total below over the next couple of weeks. But we’ve already passed the sales count of September, 2011, and pricing jumped up too.
Here were the stats on Wednesday:
Month
# of Sales
Avg $/sf
DOM
Sept ’10
220
$395/sf
75
Sept ’11
228
$389/sf
80
Aug. ’12
297
$381/sf
71
Sept ’12 (MTD)
183
$365/sf
72
Here they are today:
Month
# of Sales
Avg $/sf
DOM
Sept ’10
220
$395/sf
75
Sept ’11
228
$389/sf
80
Aug. ’12
297
$381/sf
71
Sept ’12 (MTD)
231
$380/sf
65
The breakdown between the north and south portions of NSDCC is interesting too – the lower-end has really been cooking lately:
South-End of NSDCC (La Jolla, Del Mar, Solana Beach, CV, & RSF)
Month
# of Sales
Avg $/sf
DOM
Sept ’10
103
$490/sf
78
Sept ’11
95
$521/sf
98
Aug. ’12
140
$480/sf
81
Sept ’12 (MTD)
87
$496/sf
79
North-End of NSDCC (Cardiff, Encinitas, and Carlsbad)
Month
# of Sales
Avg $/sf
DOM
Sept ’10
117
$311/sf
72
Sept ’11
133
$295/sf
66
Aug. ’12
157
$293/sf
62
Sept ’12 (MTD)
144
$310/sf
57
Compare the month-over-month change (August-to-Septmeber) and look at the difference between north and south!
Pundits would say that the lower-end market benefits from the attractive rates, FHA, etc., or perhaps the increased sales could be due to the Carlsbad buyers finally getting their damaged credit back in shape, like that one LJ realtor suggested (???). More than anything, the stronger sales counts are caused by more sellers being willing to sell for what the market will bear.
A video tour of my second RSF listing this month – both due to hit the MLS by Tuesday, and be on broker preview Wednesday, October 3rd, 1-4pm. Come on by!
This video shows an example of the case I would prepare on behalf of a buyer making an offer on a house in Bird Rock – it demonstrates the supporting data I would use to back-up my buyer’s offer price. You would think that this is standard practice for agents, but surprisingly, hardly any do it.
When I represent sellers, I would send comps with our counter-offer to support the seller’s price!
What’s the point? With the lack of comps, there is a 5% to 10% swing in price for any house. The final sales price is usually determined by which agent has the better powers of persuasion.
The Chelsea listing agent is a 30-year veteran of the business, yet she had only one closing this year – for $280,000 – before this one closed. I called her for an explanation as to why the sales price dropped to $975,000 from a list price of $1,185,000, and she said, “the sellers wanted to sell”.
We call that the “Ole close” – she just got out of the way. Get good help!
You may have noticed that the comment section has been turned off.
Since our local market has been fairly stable for the last three years, I think we have survived the worst of the bubble conditions, and it is time to move on.
From the beginning, my intention has been to inform buyers and sellers about the local market conditions, and demonstrate why I would be a good choice to be your realtor. I want to narrow the focus of this website to just those ideals.
Wouldn’t the comment section contribute? The comments are wide-ranging, and deserve full discussion – and there are other websites that provide a better format to explore all the angles. I am going to spend all of my time selling houses, and documenting the experience here so you can see what is happening on the street. The twitter account will track the general real estate topics.
I read each of the comments as they came in, and think that they were invaluable in getting us through the bubble years. I am grateful for your participation and insight – thank you!
(The 84 in spam are 9-days-worth, and most were sent by the bots)
Buyers are competing with multiple offers on homes in a market with low interest rates, and are struggling with low inventory and little new construction, local experts said at a roundtable discussion hosted by the San Diego Association of Realtors.
“We hit a brand new 30-year low,” said Karen Bates of Military Home Programs. “Buyers are being cautious about giving their information today. But, with the time on the market and with the inventory today, I would strongly encourage buyers to get solid preapprovals and be ready to jump, because if they see a property and they wait even 24 hours to send their information in, then they’re going to have trouble being competitive at all.”
Six months of inventory is typical for a traditional market, said Alan Nevin, principal at The London Group. In San Diego County, inventory is down to less than 2 months in some areas — south of Highway 94 there is 1.3 months of inventory. The average days on the market is about 60 to 70 days in a more normal market, he said, and San Diego County is down to about 49 days on the market.
“It’s a tough market to buy a property in; it’s tough to find a good property when you cordon down the issues,” said Leonard Baron of LPB Services, LLC. “For buyers who want to buy real estate: Get preapproved, get your funds ready and when you find a property you really want you better chase it like crazy. That’s going to be your best chance to get a great property.”
The housing inventory is being further limited by little new construction. When the market was “hot,” Nevin said there were about 10,000 to 15,000 permits pulled for new construction. This year, there will be about 6,000 permits for single family and multi-family units combined, said Kelly Cunningham, economist and senior fellow at the National University System Institute for Policy Research.
Robert Vallera of Voit Real Estate Services said he expects to see a “significant” increase in multifamily construction going forward, but not enough to meet the growing demand for rental housing.
“When I look at single family, what I see basically on new construction is that most of it is in North County and homes selling for $600,000,” said Nevin.
Homes under $600,000 in all areas are seeing multiple offers, said Donna Sanfilippo, president of SDAR, because of the limited inventory.
Homes in the upper price range have more inventory, said John Altman of JT Altman & Associates.
“Right now, we’re in the very most unique move-up market,” said Altman. “The market below the $700,000 price range down there is very hot because of the lack of inventory. But if you go over $700,000, we have over six months of supply there. So you’re in a seller’s market here, and a buyer’s market there.”
The number of cash transactions was at almost 30 percent in the second quarter, said Altman, up from 25 percent in 2011.
“The number of cash transactions has increased this year even though prices are going up. We’re seeing less inventory at low, low prices but there’s a lot more competition there,” said Altman.
Vallera said he once though population drove demand for housing, but quickly discovered that employment drives demand for housing. San Diego added more than 30,000 jobs in the past year, said Cunningham, which he said is “pretty strong.”
“The number of people employed in July was the highest ever in San Diego’s history,” said Cunningham.
CR said that we will see some of this year’s pricing exuberance start to dwindle as we wrap up the year. If this month’s trend continues, it looks like it is already happening for NSDCC detached sales:
Month
# of Sales
Avg $/sf
DOM
Sept ’10
220
$395/sf
75
Sept ’11
228
$389/sf
80
Aug. ’12
297
$381/sf
71
Sept ’12 (MTD)
183
$365/sf
72
We should catch up to previous Septembers in the sales category because there is always a flurry of closings the last few days of the month. But we could be facing a dip in pricing, which could put a bit of a chill in sales this Fall.
Population change, along with the migration patterns that shape it, are important indicators of fiscal and political health. Migration choices reveal an important truth: some states understand how to get richer, while others seem to have lost the touch. California is a state in the latter group, but it can be put back on track. All it takes is the political will.
A video tour of my new listing in the gated Santa Monica development near Santaluz.
This is the 5 br/4.5 ba, 4,659sf former model home with pool on an extra-large 11,956sf lot, and has upgrades galore – including an all-Viking stainless kitchen, den with custom built-ins, wine cellar, dual computer stations for study hall, and full theater room too! Price is $1,099,000:
Investors who are eagerly waiting for bargain prices from the potential foreclosure flood are likely waiting for something that won’t happen, according to the September home value forecast report from Pro Teck Valuation Services.
