This, from Jon Lansner, in today’s Orange County Register:
For the 22 business days ending February 5 – freshest numbers from DataQuick — our region-by-region analysis of homebuying shows Orange County slices up geographically speaking this way …
- DataQuick identified 570 homes selling in Orange County’s north-inland ZIP codes in this most recent period, +12% from a year ago. Median selling price? $450,000 in these 23 ZIPs. This most recent median price change was +8.4% vs. a year ago.
- Mid-county ZIPs — median selling price $352,500 – had 630 sales, -12% from a year ago. In these 24 ZIPs, the freshets median price change was +4.9% vs. a year ago.
- Combined, total homes sales in ZIPs in the north and mid-section of Orange County were -2.2% vs. a year ago as homebuying in the rest of the county ran +31.3% vs. 12 months earlier.
- North/mid-county homes accounted for 57% of residences sold in the most recent period vs. 64% a year ago.
- 325 homes sold in beach cities’ 17 ZIP codes in the most recent period, +16% from a year ago. Median selling price? $722,500 in these 17 ZIPs. Newest median price change was +4.9% vs. a year ago.
- South inland ZIPs — median selling price $493,250 – had 578 sales, +41% from a year ago. In these 19 ZIPs, the latest median price change was +16.7% vs. a year ago. ( This is the area where I’ve done most of my business, for the past 33+ years.)
- All told, countywide sales were +8% vs. a year ago. The median selling price was +15% in the past year.
End of Jon’s article.
I can feel the hubbub of activity, and see the multiple offers on properties, but it feels good to see it in print.
Here is the latest Orange County Market Report from my friend Steven Thomas, the President of Altera Real Estate:
“Short sales, sales of homes for less than what is owed on the mortgage, are creating a backlog of pending sales that seem to take forever to close. Here’s a definite fact: 2010 is rapidly becoming the year of the short sale.
With an enormous glut of foreclosures in 2008, the Federal government stepped in and in 2009 virtually strong armed big lenders to modify loans. The problem is that not everybody qualifies for a loan modification and many successful loan modifications default again on their loans down the road. Yet, there are still a tremendous number of homeowners in trouble. Both the government and banks are in agreement, that they don’t want to foreclose unless there is virtually no other alternative. And, there is a better alternative – short sales.
There are many advantages to short sales for the homeowner; including, the ability to purchase again sooner. For the lender, they get to take advantage of pride in homeownership, the homes are not dilapidated and, unlike foreclosures, do not require thousands of dollars to fix nor do they have significant holding costs. So, at the end of November 2009, the US Treasury put together a short sale directive that outlines a new process that begins on April 5, 2010, for all Fannie Mae and Freddie Mac loans. In the interim, lenders have been scrambling to address the new program and modify their current processes that have been ineffective thus far.
Currently, the short sale process is NOT working and has resulted in a deluge of pending sales that take forever to close. There are currently 6,706 outstanding pending sales in all of Orange County. Of those, 4,154, or 62%, are short sales. The problem is that almost 70% have been pending for over one month. Many have been pending for months. The reason these do not close within a short period of time is because they require lender approval. And, if there is a second loan, the process is even longer. Throw in the fact that many short sale homeowners have stopped paying their homeowner association dues, and they too have to sign off on the deal if they are obtaining less than what is owed.
Often, the buyer of a pending short sale grows so frustrated that they cancel and look elsewhere. The short sale is then placed back on the market and is often placed right back into pending status in a short period of time, and the wait for lender approval continues. With short sales, the buyer, seller and offer must all qualify. The buyer must qualify for the new loan. The seller must qualify to obtain the short sale – there must truly be a hardship. Finally, the offer to purchase must be at or near fair market value. With demand so hot, lenders are taking a closer look at value and not willing to sell at a major discount.
The current process for short sales is an absolute crapshoot. Real estate agents, buyers and sellers enter into a pending sale with no definitive timeline. Some lenders are better than others. Some second lenders are better than others. Some Realtors® are better than others. 2010 promises to be the year of the short sale.
It is the year where a lot of the distressed backlog, often referred to as the “shadow inventory,” will finally be properly diminished in the form of short sales. Yes, there will still be foreclosures. Some short sales simply will not go together. Some homeowners will just walk away from their obligations. But, banks and the government have their sights set on going the short sale route. It is in everybody’s best interest. Buyers, sellers and agents have had their sights set on short sales for about a year and half now.
As 2010 rolls along, the process is going to get better and better. It will not be perfect, but it will be better than it is right now. Short sales will finally result in more successful closed sales.
So, how do the rest of the Orange County numbers look? The active inventory increased over the past two weeks by 278 homes, or 4%, to 8,135. The active inventory last year was at 11,541, 3,406 additional homes compared to today. Two years ago it was at 15,392, 7,257 additional homes. Demand, the number of new pending sales over the prior 30-days, decreased by 4 to 3,244.
There are 425 additional pending sales compared to last year and 1,424 compared to two years ago. Demand typically rises at a quicker pace in the middle of February, so we will have to see if this trend continues. Part of the problem is that there simply is not a lot of new inventory coming on the market. The biggest complaint from agents down in the trenches is that they need fresh inventory for the many buyers that they are working. The expected market time for all price ranges in Orange County increased slightly from 2.42 months two weeks ago to 2.51 months today. At the current pace, the overall market is a seller’s market without much appreciation at all. The number of distressed homes within the Orange County housing market is keeping a lid on appreciation.
On the other hand, the higher end price ranges are experiencing a deep buyer’s market, the higher the price range, the deeper the buyer’s market. The hottest price range is homes priced between $250,000 and $500,000, with an expected market time of 1.75 months. Contrast that with homes priced above $4 million with an expected market time of 33.89 months. The active distressed home market, all short sales and foreclosures combined, increased by 54 homes to 2,705. The number of foreclosures within the active listing inventory increased in the past two weeks from 377 to 380, a gain of only three.
The expected market time for foreclosures is a sizzling 0.95 months, a deep seller’s market. Foreclosures are HOT. The number of short sales within the active listing inventory increased by 54 and now totals 2,705. The expected market time for short sales is 1.68 months, also a deep seller’s market. There are a lot more short sales than foreclosures. In 2010, short sales are going to be KING.” ( End of Steven’s report.)
markets had a terrible, holiday-shortened week last week as Wall Street
responded to worse-than-expected inflation data and action from the
Federal Reserve. Mortgage bonds sold off with force, causing mortgage
rates to rise for the second week in a row.
which showed more confidence in the U.S. economy than Wall Street
expected, and the second was the Fed’s surprise
the Fed Funds Rate won’t climb anytime soon and neither will Prime
Rate, but the Fed has sent a clear message to the markets — The Era of
Loose Monetary Policy is over.
last week’s performance, conforming mortgage rates have now unwound
most their January gains. If you’re waiting for the right time to
lock, it may have been 2 weeks ago. Consider locking in this week to
protect against any further deterioration in price.