Our new listing of a 2005-built home on a culdesac for only $739,000! The Zillow history shows that the house was rented the first of April, and as soon as the new tenant moved in, she told the landlord that she was not going to pay rent because of the eviction moratorium. The owner decides to cheap-sell it with a non-paying tenant inside, but no takers. The ensuing hysteria around the house caused by people thinking they might be able to buy one for $100k under value eventually caused the tenant to move out.
Our reader ‘just some guy’ sent in this article and quipped about these writers who insist on promoting a foreclosure scare due to the pandemic. But it is worth noting because it could become a self-fulfilling prophecy just due to the lack of a counter-argument being published at large.
This article is quick to point out that there isn’t a problem yet:
Even after the foreclosure moratorium expires, homeowners on a government-backed loan will have a forbearance option to fall back on, so there’s no need to panic just yet. But digging into mortgage-delinquency data shows how much water is building behind the dam that is these government backstops.
In January, just 3.22 percent of mortgages were in delinquency. By May, that number shot up to 7.76 percent — about three points shy of where the delinquency rate peaked during the financial crisis of 2008, which was at 10.57 percent.
Prior to the the pandemic in March, the number of mortgages in forbearance was fewer than 100,000. Currently, there are roughly 4.5 million mortgages in forbearance, although this is obviously a reflection of homeowners having the option of forbearance, but it gives you a sense of the scope.
Not every homeowner in forbearance is past due on their payments; some went into forbearance as a precaution, or just because they could. Some homeowners were in forbearance and have since gotten out, either because there didn’t end up being a need or they got a new job. For June, 21 percent of mortgages in forbearance were current on their payments, but as the pandemic goes on, more will enter into serious delinquency that would normally trigger a foreclosure.
With the forbearance option available for up to a year, economists have baked into their models a wave of foreclosures in the spring of 2021, which they say would cause a very rare drop in U.S. home prices.
We also know that the loan-modifications that worked last time will get employed again before banks lose a penny. The only people they might foreclose on are homeowners with sufficient equity, but if it comes to that, then those folks will sell their house instead and make out nicely.
It does add an interesting component to next year’s selling season though, which should be a humdinger!
BTW, I don’t have any insider info on the rumored Compass/Keller Williams merger. Even if it’s been discussed, it’s hard to believe the egos involved would allow for it.
The index in May and June might ‘decelerate’, but the usual seasonal surge in our Case-Shiller Index should be delayed this year. The index is hitting all-time highs while we are in a recession, officially!
San Diego Non-Seasonally-Adjusted CSI changes:
Nationally, prices rose 4.5% annually in May, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. That is down from the 4.6% gain in April.
Home prices in the 10-city composite increased 3.1% annually, down from 3.3% in the previous month. The 20-city composite rose 3.7% year over year, down from 3.9% in April (Detroit was excluded from the composite due to data collection issues).
“More data will obviously be required in order to know whether May’s report represents a reversal of the previous path of accelerating prices or merely a slight deviation from an otherwise intact trend,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “Even if prices continue to decelerate, that is quite different from an environment in which prices actually decline.”
Home values increased in all 19 of the cities for which data was available, but the gains accelerated in just three. Prices were accelerating in 12 cities in April and 18 cities in March.
Regionally, price gains in Phoenix, Seattle and Tampa continued to be the strongest in the nation. Phoenix posted a 9% year-over-year price increase, followed by Seattle with a 6.8% increase and Tampa with a 6% increase. Price gains were smallest in Chicago, New York and San Francisco.
Are you looking for a smaller one-story view home to re-finish?
Do you like being at the top of the hill on a quiet single-loaded culdesac?
The insurance company did the remediation of a water leak, but expect these seniors to manage their own reconstruction project. We’d rather you do it your way! The house has a roof, newer sliders and windows, and shutters – do you mind doing the rest?
Here is the last sale of this floor plan – it closed at $842,500:
In the last week, we had 92 new NSDCC listings, and 80 pendings!
We should see a bunch of the pendings close escrow this week, and it looks probable that our July sales this year will exceed those from last July (we only need 46 closings this week and there are 475 pendings). It’s what happens when we have the typical 6-month selling season squeezed into 3-4 months.
San Diego County isn’t included in the graph above but the trend is similar. The author is happy to point out the negatives, but with inventory still well under what it was last year and pandemic/unrest raging, it’s a miracle that sales are so strong. San Diego County had 3,557 sales last month, which was only down 2.4% from June, 2019, and the median sales price of $600,250 was up 1.7% YoY.
We only have about a month left of prime homebuying before buyers get distracted by school starting and election fervor. With more inventory and rates in the 2s, the next 30 days should be the best of the year!
Are Southern California homeowners back in a selling mood?
Zillow’s weekly report on activity from brokers’ listing services in Los Angeles, Orange, Riverside and San Bernardino counties shows owners listed 5,117 existing homes for sale in the week ended July 18. My trusty spreadsheet tells me that’s up 3% vs. the previous week. But this nugget is more noteworthy: It’s the largest addition to the for-sale inventory in 19 weeks.
One unsolved puzzle of the pandemic-riddled economy is why homeowners have refused to be sellers. Were they fearful of home showings? Or skittish about looking for another home to buy? Or perhaps they’re unsure of their own finances?
Even with a recent jump in new listings — the highest since March 7 — the week is down 13% vs. a year earlier. And the four-county inventory of everything a house hunter could buy was 27,170 this week — off 32% in a year. Limited supply may be one reason sales have slumped over the past three months.
Perhaps these newly eager-to-sell owners are reacting to new escrows: 3,696 existing homes were under contract last week, 6% more than the previous seven days.
It’s the 11th positive week for pending purchases out of the last 13 as the housing market rebounds from economic turmoil created by “stay at home” orders designed to slow a pandemic’s spread.
Let’s note that a rapidly uncertain employment picture could be overpowering the record-low mortgage rates that have put some house hunters in a buying mood. California’s U-turn on business reopenings doesn’t help consumer confidence.