It’s all over the news – the housing double dip is here.
They say that the DD is caused by an overload of foreclosures dragging down prices – but they are talking about the overall national market.
Are the recent trustee sales building a backlog of REOs around San Diego?
It looks like more of the same around here – just when the servicers get some momentum, they turn off the spigot. There have only been 14 successful trustee sales in NSDCC over the last two weeks, so we’re back to the 1+ foreclosure per day.
The threat of future foreclosures is always lingering – could the worst be yet to come? With the banks and servicers controlling the flow, there doesn’t seem to be much reason to expect a flood coming anytime soon – or ever.
How many REOs are floating around in the shadows?
Here are the San Diego County properties owned by each lender, the number of SFRs they own in North San Diego County Coastal, and the count of how many of those aren’t listed yet:
| REO Owner | SD All Prop | NSDCC SFR | NSDCC SFR not listed yet |
| Fannie Mae | |||
| Wells Fargo | |||
| Freddie Mac | |||
| Bank of NY | |||
| Bank of America | |||
| JPMChase | |||
| Citi | |||
| Totals |
In the depressed areas where REOs are abundant, there’s no surprise to see some can-kicking, but around North County Coastal it’s been quiet. A few of the shadows have just been foreclosed, so you know there is some lag for evictions, repairs, and processing. Others are involved in litigation too, so it doesn’t appear that they are purposely delaying the process much around North SD County Coastal.
The buyers around NSDCC will welcome the 25 well-priced SFR REOs when they hit the open market over the next couple of months – expect bidding wars!
I wonder how many homes there are that should have a NOD, but it has not been issued.
Tack those onto the end, we’ll get to them.
These guys who say we’re going to bottom on X date are nuts – they could drag this out for 20-30 years!
Would you be surprised if one day we hear a story about a guy who got 10 years of free rent? Or how about the lady in Florida who has already had 20+ years?
The lady in Florida will hold the record
from sddt.com
The price index in San Diego fell 2.1 percent on a quarterly basis and 5.5 percent over the first quarter of 2010, to $347,500.
Zillow’s price index is based on the median estimate among all homes listed with the real estate information company in each market.
The negative equity rate, the percent of all single-family homes with a mortgage that are worth less than the remaining value of the mortgage, increased to 28.4 percent nationwide and 26 percent in San Diego.
Based on the first-quarter data, Zillow has adjusted its forecast, predicting that the housing market now will not reach bottom until 2012 at the earliest.
“With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” said Zillow Chief Economist Stan Humphries in a release accompanying the data. “We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later.”
Only three markets nationwide experienced declining home values in the first quarter.
Nationwide, home values are now down 29.5 percent from their peak in June 2006.
Prices in San Diego have fallen 35.3 percent from their peak.
Mark Goldman, professor in the Corky McMillin Center for Real Estate at San Diego State University, said the feeling that prices have farther to fall is keeping would-be buyers out of the market.
Sales of county homes have hovered around 2,000 per month, according to numbers provided by the San Diego Association of Realtors, while that number approaches 4,000 per month in a healthy market.
Absent those buyers, the market has already reached stability, according to Goldman.
“Don’t equate stability with rising prices,” he said. “It’ll be a long time before we seen any rapid spikes or appreciation. Housing is basically at replacement cost. America is re-thinking housing. We’re beginning to see it as a consumption item.”
But at the same time, he disagrees with those who’ve predicted the housing market has another 10 percent or even 20 percent to fall before it reaches its bottom. The market’s already at bottom, he said, and now it’s just bouncing along.
“The market is getting used to new realities of income numbers and the availability of mortgage capital,” he said
Mark Goldman was the guy on the KPBS radio show with me.
“The market’s already at bottom, he said, and now it’s just bouncing along.”
This is the key here. would be buyers should study recent closings to figure out what are the low closings in the neighborhood (tossing out the outliers that smell of fraud of course) and focus on that price point as their goal.
I do question the prevailing logic that the bottom is here. Especially when we’re within 5% of the March 2009 lows and drifting lower. It’s a lot like calling the top of the stock market here with prices drifting higher. Housing is a little different than stocks because houses aren’t as liquid, but if those March 2009 lows break and the bottom isn’t here you might see buyers shy away again.
I think the analyst is probably right we will bounce along a bottom or slowly drift lower, but if we get a surprise I’d bet the downside surprise.
Mr. Goldman must be a millionaire if he is able to accurately predict the bottom of a complex economic model such as the housing market. Beware of those who claim to know the “bottom” or the “top”! Every good investor knows you can’t time the market, even housing.
Just think back to 2006 and 2007. These are the same people who were saying everything was just fine. Why and who pays them? If my advise turned out like theirs, I would be sued in a heartbeat.
I will say that I’m pretty excited to see the number of conventional sales jumping up… with multiple offers too!! And, as someone who specializes in investments… if my clients are making profits after all expenses at the price they are paying today.. then all is well.. relatively. They don’t even have to charge ridiculous rents and they are bringing the properties up from scroungy levels so the neighborhood benefits as well.