Home prices double-dipped in April, dropping 0.7% below the previous low in March 2009, according to analytics firm Clear Capital.
Prices first reached a new low in California in March. But in April national prices fell 5% below levels measured one year ago and decreased 4.9% from the previous three months. National home prices sank 11.5% over the previous nine-month period, a decline not seen since 2008, Clear Capital said.
“Markets have entered uncharted territory,” Clear Capital said.
Every major metropolitan statistical area showed a drop from the previous three months. While spring brings hope of a traditional turnaround, this will be the first homebuying season spent without the homebuyer tax credit since 2008.
The major hurdle is the amount of distressed property on the market. REO sales account for 34.5% of overall activity nationwide after declining to nearly 20% in the middle of 2010, according to Clear Capital. This same pattern surfaced in 2008, when REO saturation grew from 20% to 32% by the end of the year.
“The latest data through April shows a continued increase in the proportion of distressed sales that are taking hold in markets nationwide,” said Alex Villacorta, director of research and analytics at Clear Capital. “With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales.”
Clear Capital looked at the home prices trends in 2008 and found similar patterns in 2011. But the stimulus quickly reversed the movement in 2008. Home prices, as of April, are down 25% since the 2008 period. Unlike the last downward push, this one heads into the buying season, which could push prices higher, Clear Capital said. And the market faces many challenges that can only be solved through more sales.
“In light of the compounding effects of winter’s seasonal slowdown and increased distressed sale activity, the market now faces the true test of whether prices can rebound in the historically active spring season,” Villacorta said.
from Clear Capital’s website, through March, 2011:
For the first time in years, a guy who quantifies the foreclosure crisis got to report some good news. Kyle Lundstedt’s colleagues at LPS Applied Analytics call him Dr. Doom, as he calculates all the numbers for the monthly Mortgage Monitor Report.
But this month he got to report a drop in mortgage delinquencies, down more than 11 percent month-over month, to the lowest level since 2008.
“We’re starting to see that there are a lot of folks who are still hanging in there,” says Lundstedt. “The population is a better credit quality population.”
The subprimes, Alt-A’s, the bad lending of the housing boom, have largely moved through the system already, not to mention that big banks and servicers are getting far more aggressive with loan modifications. One quarter of the loans that were more than 90 days delinquent last year are now current. That’s not to say they will all stay current, but that’s a good sign.
Unfortunately, that’s all Dr. Doom could muster on the bright side: “It’s progress; it’s not game-changing.” That’s because the foreclosure pipeline, that is loans 90+ days delinquent or in the foreclosure process, is enormous.
Foreclosure inventory is at a new all-time high. There are so many loans still waiting to go into foreclosure…in fact the total number of loans 90+ delinquent is 45 times the size of the current monthly foreclosure sale number. 45 times!
Larry Summers, one-time director of President Barack Obama’s National Economic Council, believes the economy is recovering, albeit not as fast in some areas as desired, but enough to forestall a double dip.
“There is no longer any talk of a depression,” he told journalists at a Lincoln Institute of Land Policy seminar in Cambridge, Mass., over the weekend. “Now, there’s very little talk of a double dip.”
He pointed out that the economy has grown for seven straight quarters and the unemployment rate has fallen.
“The stock market has had the best two-year run since the beginning of the 20th century,” he said. He also said corporate profits are best in any two-year period since World War II.
But he acknowledged things are not improving fast enough.
“To be sure, we have a huge concern that the recovery is not nearly as rapid as we would like,” he said. “The housing sector remains extraordinarily weak. The nation’s long-term debt situation is not where it should be. There have been major steps in financial regulation but we can’t be certain we will avoid another financial crisis.
“But the catastrophe that could have been averted has been averted , and I think it has been averted with a combination of the right diagnosis, determined effort to act on that diagnosis, a good deal of luck and an important change in psychology.”
Summers, who served in the administration from 2009 until early this year, returned to Harvard as president emeritus. He was Treasury secretary under former President Bill Clinton and chief economist of the World Bank.
From sddt.com (SDCo. homes that have no mortgage = 20%):
Nearly one in three mortgage holders in San Diego owe more than the value of their home, according to a CoreLogic report.
Of residential properties with a mortgage in San Diego County, 29.2 percent, or 173,139, were in negative equity at the end of the fourth quarter of 2010, the report said.
Negative equity in the county fell from 29.5 percent at the end of the third quarter. An additional 5 percent, or 29,450 homes, were in near-negative equity, defined as 5 percent equity or less.
Together, mortgages with 5 percent equity or less accounted for 34.5 percent of all homes with a mortgage in the county.
While the percent of San Diego mortgages in negative equity declined on a quarter-to-quarter basis, the percent of homes in near-negative equity increased from 4.8 percent to 5 percent during the same period.
This suggests that the decrease in negative equity came from the foreclosure of underwater mortgages, rather than price increases pushing borrowers above water.
Nationally, negative equity increased in the fourth quarter to 11.1 million, or 23.1 percent of all homes with a mortgage, from 22.5 percent in the third quarter.
Prices declined in the last quarter of the year, leading to lower home values and an increase in the rate of negative equity.
An additional 2.4 million borrowers had less than 5 percent equity nationwide, bringing the total of negative equity and near-negative equity mortgages across the country to 27.9 percent of all residential properties with a mortgage.
“Negative equity holds millions of borrowers captive in their homes, unable to move or sell their properties,” said Mark Fleming, CoreLogic chief economist. “Until the high level of negative equity begins to recede, the housing and mortgage finance markets will remain very sluggish.”
Of those mortgages in near-negative equity or negative equity nationwide, nearly 10 percent had negative equity of 25 percent or more; California had the third largest share of these severe negative-equity mortgages, with nearly 20 percent of all residential properties with a mortgage.
CoreLogic used public record data to calculate its mortgage debt outstanding, which includes first mortgage liens and junior mortgage liens and is adjusted for amortization and home equity utilization.
The Santa Ana-based company estimated the current value of homes using its proprietary automated valuation models.
The Case-Shiller November index showed more negativity overall, to the delight of the mainstream media. Calls for the double dip will escalate, and soon the government will think they need to intervene. Hopefully they’ll keep their hands in their pockets, and not ours.
From the C-S press release:
“With these numbers more analysts will be calling for a double-dip in home prices. Let’s take a moment to define a double-dip as seeing the 10- and 20-City Composites set new post-peak lows. The series are now only 4.8% and 3.3% above their April 2009 lows, suggesting that a double-dip could be confirmed before Spring. Certainly eight cities setting new lows, and with the only positive news concentrated in southern California and Washington DC, the data point to weakness in home prices,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “With an annual growth rate of +3.5% in November, Washington DC was the strongest market, but still well below the +7.7% annual rate of growth seen in May 2010. The only city with a gain in November was San Diego, up a scant 0.1%. While San Diego, Los Angeles and San Francisco are still ahead from November 2009, their annual rates are shrinking in recent months.
Here is the San Diego Case-Shiller Index history:
The idea of lower pricing will cause more people to consider looking to buy a home, but what will they think when they see over-priced turkeys (OPTs) everywhere they go? What will home-lookers do when they realize the disconnect between media reports, and the reality on the street? Commit to spending inordinate amounts of time and energy searching for the needle in the haystack, or give up?
When they can buying anything else they need within minutes, it’s hard to imagine them devoting the time to dig for the deals. But will they just pay the price?
There is more hub-bub at cnbc about December being full of distressed sales.
NAR had reported that 36% of December sales nationally were REOs and short sales, and the new report from Campbell Surveys said 47%.
How about North San Diego County Coastal?
December Detached Sales and Price-per-SF:
Type
2009
2010
REO
25/$295
18/$320
SS
17/$267
19/$315
Reg.
197/$428
167/$400
Totals
239/$403
204/$385
No change year-over-year in NSDCC – an identical 18% of December sales were distressed.
Overall, the YOY sales were down 15%, and pricing down 4%, but when you look around, or talk to some of these listing agents, you’d think it was 2005 all over again!
Cramer got fired up about the national spike in December sales, but locally the sales were slightly cooler last month than in 2009. Let’s note than in 2009 there was a tax credit in play, but for the higher-end communities I don’t think it had much impact.
Most of Carlsbad, Encinitas, Rancho Bernardo, RP, Carmel Valley, and Scripps Ranch’s numbers look fairly steady, and Rancho Santa Fe was the most interesting. Check the 3-year December trend for your area below:
“There has been an effective moratorium on foreclosure,” said Roubini.
Around here it looks like the servicers got back on their horse pretty quick:
“The shadow inventory of not-yet-foreclosed homes—due to the moratorium—will surge in the next year,” Roubini says.
Don’t they say that every year? I think the servicers will keep dripping them out little by little. There is no pressure on them to hurry up, and nobody thinks that adding more supply would help the situation. Well, almost nobody.
The detached sales in North San Diego County Coastal have been holding up pretty well in 4Q10.
The 4Q09 sales were somewhat enhanced by the tax credit, yet the last two months aren’t too far behind. This quarter should only end up about 10% lower than the 4Q09 total of 642 sales.
In the peak 2005-2007 era, the pricing for most months was range-bound between $450 to $500/sf, so we’re about 20-25% lower now. It looks pretty steady too – we would need a surge of well-priced inventory to create frenzy, and push pricing higher:
I tacked on 10% to December, 2010’s total to adjust for tomorrow’s closings, and late-reporters. Currently there are 1,261 active listings whose list prices are averaging $619/sf, and have been on the market for an average of 131 days.
The local Case-Shiller index for October dropped again, for the third month in a row. The SD index, which was 165.02 in July, is now down to 159.99 (a plunge of 3%), though year-over-year it’s still up 3%.
Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
jesus a sahagun
2024-11-10
Verified
This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SabihaPasha
2024-07-22
Verified
Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
dodyfrancis
2024-07-10
Verified
I appreciate Jim & Donna's great teamwork, sound advice, and guidance that eased the stress of selling our Carlsbad home. Their professional input and assistance throughout the process was very helpful. Highly recommended!
sbisachsen
2024-07-10
Verified
The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
user19164788
2024-06-21
Verified
We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
cali4neal
2024-05-07
Verified
We had a wonderful experience buying our home with Donna and Jim! In particular I was very impressed with their efficiency and support through the purchase process. As we were doing the walk through, Donna started contacting roofers, plumbers, aircon, electricians, etc for all the areas we needed potential repairs - by the time we were done with the walk through appointments were already set up to get estimates for all the major services. When we had to change an appointment, or couldn't make one, Donna was there to arrange things to fit our schedule. Even after we closed on our home, Donna helped set up the repairs we needed before move in day. They truly went above and beyond to deliver exceptional service. I'll be calling them for our next home!
zuser20160809095816651
2024-03-16
Verified
The sale of our home exceeded our expectations - Jim and Donna Klinge are the best!
We’ve followed Jim’s Bubbleinfo blog since the 2006 housing bubble. After he helped us buy in 2017 we stayed in touch and Team Klinge were the obvious choice when it came time to move. They guided us through the preparation of the house, including a kitchen refresh - Donna and Lisa skillfully managed the various contractors for us after we had moved out of state. Donna’s excellent attention to detail and regular communication made the whole process run smoothly from a distance.
Jim’s market knowledge, expert negotiating skills and candid opinions, together with Donna’s responsive communications and problem solving, set them in a league of their own.
Highly recommended!
bourmakin
2024-02-09
Verified
Jim and Donna have exceeded my expectations with sale of my house. It was best experience with house sale. Professional, responsive, superior negotiating skills. I would recommend them with 5 star (I would give them even more than max) rating. Sale of my house was closed for really good price in 10 days. Jim and Donna perfectly handled house preparation for sale. Thanks a lot!!!
user1916779
2023-11-17
Verified
Jim and Donna have exceeded my expectations and made my most recent move back to California go so much more smoothly than I expected. Jim’s Bubbleinfo blog was full of useful information about the current market conditions. His experience helped us make a successful offer for the home we wanted in a desirable neighborhood. After the purchase Donna organized the work we needed done in the house without us having to make an additional trip. We were pretty worried when we started searching for real estate that not being in the area was going to makes things really difficult but Jim and Donna made the process so much easier. I enthusiastically recommend them.
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“Markets have entered uncharted territory,” Clear Capital said.
