Boker's Blog

“Glass Half Empty” Perspective

LOS ANGELES TIMES BUSINESS SECTION 1/29/2012
Jonathan Lansner
“NEW HOMES SOLD IN 2011”
302,000 new homes sold in U.S. in 2011…the worst year in records that date to 1963

“Glass Half Full” Perspective

ORANGE COUNTY REGISTER BUSINESS SECTION 1/29/2012
Jonathan Lansner
“TRENDS”
Reportsonhousing.com finds that as of January 19, the number of new Orange County pending sales was up 15 percent compared with the same period a year ago.

ORANGE COUNTY REGISTER BUSINESS SECTION 1/29/2012
G. U. Krueger
“FORECLOSURES ARE A HOT TICKET”
Maybe that foreclosure “shadow supply” issue is not as bad as we think, because demand for foreclosed properties is strong.

Are still being gobbled up – they represent 20 percent of total transactions in the third quarter of 2011. In California, the share of foreclosure related sales was 44% in the third quarter of 2011

DSNEWS.COM
Krista Franks
“HOUSING CRISIS TO END?”
Capital Economics expects the housing crisis to end this year…one of the reason is the loosening of credit

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability. Banks are now lending amounts up to 3.5 times borrower earnings.

This is up from a low during the crisis of 3.2 times borrower earnings. Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.” In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

DSNEWS.COM 1/20/2012
Krista Franks
“HOUSING RECOVERY”
Long-awaited housing recovery is beginning to blossom, according to industry experts taking a look at recent existing-home sales.

While admitting home sales “are still very low,” Paul Dales, chief economist at Capital Economics, says “it is clear that housing recovery is now well underway.”

The evidence: home sales have been on the rise for the past three months, posting a 5 percent increase in December. Lawrence Yun, chief economist for the National Association of Realtors (NAR), concurs with Dales’ assessment, saying “The pattern of home sales in recent months demonstrates a market in recovery.”

Investor demand remains steady with 21 percent of homes sold in December going to investors after this category of buyers took 19 percent of purchases in November and 20 percent one year ago.

Cash sales – commonly linked to investors – made up 31 percent of December’s existing-home sales. This rate was 28 percent in November and 29 percent a year ago.

“The inventory supply suggests many markets will continue to see prices stabilize or grow moderately in the near future,” Yun said.

“Glass Half Empty” Perspective

ORANGE COUNTY REGISTER BUSINESS SECTION 12/27/2011
Jeff Collins
“Lower home prices hit where it hurts: The wallet”

Home sellers suffered the most in 2011. “Sellers got less for their homes. That’s less cash to pay off the mortgage, pay broker commissions, escrow fees, taxes, and termite inspectors. And perhaps less (or nothing) to put in the banks or pay towards the next home.” Sales in 2011 suffered an 11% drop, grossing about $12.7 billion, which is the worst it has been since 2008.

ORAGNE COUNTY REGISTER REAL ESTATE SECTION 12/27/2011
Jonathan Lansner
“Newport Beach home sales fall 17%”

Recent data shows that sales in Newport Beach are down. “57 residences sold in Newport area vs. 69 deals closed in the matching period a year ago—a 17.4% decline over the past 12 months. For the month of December, Corona del Mar (92625) experienced a 15.8% drop in homes sold compared to a year ago, 92660 was down 23.3%, 92661 was down 33.3%, 92662 was up 300%, 92663 was up 4.5% and Newport Coast (92657) was down 26.1%.

LOS ANGELES TIMES BUSINESS SECTION 12/27/2011
Tiffany Hsu
“Home prices fall in October, Case-Shiller report says”

“Home prices in the nation’s largest cities fell in October for the second straight month, continuing to dash hopes that the sluggish housing market is headed for an upturn.” According to the Standard & Poor’s/Case-Shiller Index showed that home prices dropped in 19 of 20 cities since September. “Sales in California were up 4% last month compared with the same period a year earlier, though they fell 4.2% from October.

ORANGE COUNTY REGISTER BUSINESS SECTION 12/26/11
Jeff Collins
“Commercial broker eyes choppy markets ahead”

“Eyeball 2012!” Jeff Moore, a senior managing director for the Orange County for CBRE, was interviewed on his opinions and speculation of the 2012 Real Estate Market. He recapped on 2011 explaining that “coastal markets were faring much better than inland markets” and that economic uncertainty caused a lot of business to “pull back in the last 6 months.”

His outlook for 2012 is similar to the story of 2011. “Uncertainty will continue and the markets will remain choppy. It’s clear that businesses are tiring of the ongoing uncertainty and they want to make deals.” If we want to change things back to the ‘good ole days’ (2006), It’s going to be a long road. “Instead of focusing on getting back to where we were, we need to adjust our thinking to this environment so that we start to create positive growth once again.

ORANGE COUNTY REGISTER BUSINESS SECTION 12/14/2011
Jeff Collins & Jonathan Lansner
“Median Falls to 2 1/2-Year Low”

“Orange County’s home pricing got hit with autumn’s chill, falling to the lowest level in two and a half years.” The median price of an Orange County is down by $50,000 to around $400,000. This enters the realm of the market bottom in January 2009. 62 of the 83 ZIP codes in Orange County reported declines in median selling price in November. BUT it seems that price cuts have spurred some buying.

LOS ANGELES TIMES BUSINESS SECTION 12/15/2011
Alejandro Lazo
“Scheduled Foreclosure Auctions Soar”

“Bank took steps to sell more than 26,000 California homes last month, a 63% jump.” Los Angeles times write Alejandro Lazo suggests that this is a sign that there might be a surge in discounted, bank-owned properties hitting the market this following year. BUT, it appears that many of those homes that were foreclosed on this summer, are “quickly working their way through the process.” California had the biggest month over month increase in scheduled auctions.

ORANGE COUNTY REGISTER REAL ESTATE SECTION 12/18/2011
Jeff Collins
"Lenders Tamp Short Sales”

According to Steve Thomas of ReportsOnHousing.com, “Lenders appear to be putting the brakes on so-called short sales in Orange Count, while sales of bank owned foreclosed homes have risen.” This could cause some potential problems because short sales tend to generate more cash for the lender. Foreclosed homes are up 12% compared to a year ago. Since short sales generate more cash, it makes economic sense to let people short sale their homes vs. foreclosures. It was expected that the Short Sale process would improve, but unfortunately it has not.

Steve Thomas provides an update of the Housing Markey, listing that 31% of Orange County homes for sale, are short sales. 58% of all pending sales are short sales, yet only 24% of all successfully closed sales are short sales.

ORANGE COUNTY REGISTER BUSINESS SECTION 12/20/11
Jonathan Lansner
“Trackers say home prices sliding”

According to the Real Estate Research Council, based at Cal Poly Pomona, they have tracked home values and determined they have been falling at an annual rate of 4.1%. They track home values by valuing the same homes every six months which helps rid the problematic data from computer-based indexes. In April it was calculated that Orange County homes were devaluing at a rate of 0.3% and a year ago in November, appraisers valued a rise of 4.5% annual rate.

“Glass Half Full” Perspective

ORANGE COUNTY REGISTER REAL ESTATE SECTION 1/1/2012
Jonathan Lansner
“2012: SLOW BUT STEADY”

Insiders expect housing market to continue its recovery with prices flat or up slightly. We should have a solid first quarter followed by a “watch and see” market

ORANGE COUNTY REGISTER REAL ESTATE SECTION 12/31/2011
Jonathan Lansner
“ORANGE COUNTY HOUSE PAYMENTS HAVE HIT AN 8-YEAR LOW”

Local homebuyers are getting monthly a house payment that is the same as what was available eight years ago.

ORANGE COUNTY REGISTER REAL ESTATE SECTION 12/29/2011
Jonathan Lansner
“Analyst: No doomsday scenario for economy”

According to veteran California real estate analyst G.U. Krueger the economy is actually improving and here are his reasons why. “Spin doctors distort economic outlook. Business news these days in interpreted as negatively as possible. Positive news in down played and the struggles of the middle class and heartlessness of the wealthy is exaggerated.” Also, he explains that Real GDP is up 1.8% and Consumers are back. AND “finally, real estate excesses built up during the bubble, are being absorbed.”

LOS ANGELES TIMES BUSINESS SECTION 12/29/2011
Nathaniel Popper
“Standard & Poor’s positive for 2011 once again”

“The S&P 500 index on Thursday once again reversed course and rose above the level where it was when 2011 began. The Index has bounced in and out of positive territory all week.” It was up 13.8(1.1%) points and the DOW Jones Industrial average rose 135.63 points (1.1%). “Although there are fears about the European crisis that sent markets down Wednesday, investors gave the U.S. Economy confidence as business activity grew through out November.”

ORANGE COUNTY REGISTER REAL ESTATE SECTION 12/28/2011
Jonathan Lansner and Jeff Collins
“2012 HEALTHIER AND LEANER”

"The Orange County housing market is poised to start 2012 with a much healthier and leaner listing inventory, which will ultimately prove to be a catalyst to stronger demand in the lower ranges.” Thomas also crunched some numbers to calculate market time for 8 pricing slices and determined that 5 had a faster market time vs. 2 weeks ago and 7 improved over the last year. Still, homes over a million dollars are three times harder to sell than homes under a million dollars. These properties have a market time of just over 10 months compared to 3 months it takes to sell homes listed under a million.

“California’s housing market showed some signs of luster in November with sales picking up over the same month, a year earlier.

In Southern California, sales rose 0.3% from October to November and a total of 4.2% compared to a year ago.

ORANGE COUNTY REGISTER REAL ESTATE SECTION 12/18/2011
Jonathan Lansner
“A Search for Silver Linings”

“O.C. housing prices hit a 31-month low last month while sales were barely up,” but according to O.C. Register write Jon Lansner, there may be a silver lining…”Perhaps cheap mortgage rater are helping a bit.” Sales were up 2.5% in October to November, which is typically a slow period that has shown an average decline of 7.4% since 1988.

“Glass Half Empty” Perspective

ORANGE COUNTY REGISTER REAL ESTATE SECTION 11/20/2011
Jeff Collins
“DISTRESSED LISTINGS”
37% of all O.C homes listed are in distress (3,488). 90 of the listed distressed homes are priced over $1 million…3% of all distressed listings.

LOS ANGELES TIMES BUSINESS SECTION 11/30/2011
Alejandro Lazo
“HOME PRICES SLIP, ENDING A POSITIVE RUN”
Home prices in the nation’s largest cities fell in September. Only Washington, New York and Portland had gains in September.

“Glass Half Full” Perspective

ORANGE COUNTY REGISTER REAL ESTATE SECTION 12/4/2011
Jeff Collins
“14 PERCENT FEWER O.C HOMES ARE UNDERWATER THAN 2 YEARS AGO”
Georgia has pushed California out of the “top 5” among the nation’s most “underwater” states

ORANGE COUNTY REGISTER REAL ESTATE SECTION 11/29/2011
Jonathan Lansner
“SELLERS PULL HOMES OFF MARKET”
It looks like many Orange County homesellers will take the winter off. The inventory experienced its biggest drop in 5 years. A 4.2 % drop in inventory in the past 2 weeks and a 22 percent in a year. You may have to wind the clocks back to 2006 to find the last time the inventory dropped by 4 percent at the end of November. The drop in inventory is due to a combination of stronger demand and more homeowners throwing in towel with the realization that this is cyclically the slowest time of the year to sell.

LOS ANGELES TIMES BUSINESS SECTION 11/29/2011
Jeffry Bartash
“NEW-HOMES SALES EDGE UP IN OCTOBER”
Purchases of new homes rose to an annual rate of 307,000 up 4,000 from the previous month. New-home sales were 8.9% higher compared with a year earlier.

LOS ANGELES TIMES BUSINESS SECTION 11/22/2011
Alejandro Lazo
“HOME RESALES RISE IN OCTOBER”
More people closed deals on home purchases in October than economist expected, driving down the number of homes available for sale to an eight-month supply. Existing-home sales rose 1.4% from the previous month and 13.5 % from October 2010.

ORANGE COUNTY REGISTER REAL ESTATE SECTION 11/20/2011
Jeff Collins
“AFFORDABILITY”
1 in 3 households can afford a O.C. house. Home affordability rates remain high, but it still takes a six-figure income to buy a median-priced house in Orange County.

“Glass Half Full” Perspective

ORANGE COUNTY REGISTER REAL ESTATE SECTION 11/14/2011
Jeff Collins
“OPTIMISTIC”
NAR Chief Economist Yun “Everything is moving in the right direction”, projecting an 8 to 10 percent gain in U.S home prices.

ORANGE COUNTY REGISTER REAL ESTATE SECTION 11/8/2011
Jeff Collins
“CALIFORNIA HOME-PRICE RECOVERY EXPECTED IN 2012”
UCLA economists forecast that California home prices will rise steadily over the next 6 years. The UCLA Anderson Forecast predicted that the median price will increase 52.5% by 2017.

Home prices are projected to turn around in 2012 – jumping 11.5 % next year, then rising 10 more in 2013. The recovery is expected to run through 2017.

Sales will climb from 2013 through 2015, hitting a high water mark of 547,945 transactions that year.

“Glass Half Empty” Perspective”

ORANGE COUNTY REGISTER REAL ESTATE SECTION 11/13/2011
Jeff Collins
“DISTRESSED SALES”
National Association of Realtors predicts that a third of all U.S. sales will be distressed homes through 2013

1,533 new escrows were opened to by distressed O.C properties in the past 30 days. That is 54 percent of the 2,854 new pending sales countywide.

19% of distressed listings are REO’s and 81% are “short sales”

LOS ANGELES TIMES BUSINESS SECTION 11/5/2011
Alejandro Lazo
“FORECLOSURE ACTIVITY IS UP 7% OVER SEPTEMBER”
Banks are reasserting themselves against troubled borrowers, sending close to 78,000 properties into the first stage of the foreclosure process in October after a nearly yearlong slowdown brought on by increased scrutiny from regulators.

Foreclosure actions were filed on 230,678 US homes in October, up 7% from the month before

77,733 Notices Of Default were filed, a 10% increase from the previous month

Lenders repossessed a total of 67,627 homes, a 4% increase from September

ORANGE COUNTY REGISTER REAL ESTATE SECTION 11/5/2011
Jonathan Lansner
“IN MID-OCTOBER, HOME PRICES HIT 10-MONTH LOW IN O.C.”
Only 14 of 83 O.C. ZIPs had both rising sales and prices in the period. The median selling price for all residences is $414,000. That is off 5.7% vs. a year ago. Pricing hit $445,000 in June

“Glass Half Full” Perspective

LOS ANGELES TIMES BUSINESS SECTION 10/26/2011
Alejandro Lazo
“HOUSING PRICE INDEX EDGES UP”
Gauge of home values in 20 metros area climbs .2% in August, the fifth straight gain.

ORANGE COUNTY REGISTER REAL ESTATE SECTION 10/25/2011
Jonathan Lasner
“HOMEBUILDER OPTIMISM HITS FOUR-YEAR HIGH”
The west led the country with its 9-point gain to 21-the highest HMI for the region since August of 2007. (scores above 50 are considered bullish) The national index rose 4 points to 18.

“Glass Half Empty” Perspective

LOS ANGELES TIMES BUSINESS SECTION 10/30/2011
Lauren Beale
“DID TRUMP TAKE A HAIRCUT ON SALE OF HOUSE?”
His Rancho Palos Verdes estate, listed at $12 million, sold for $7.15 million

ORANGE COUNTY REGISTER REAL ESTATE SECTION 10/23/2011
Jeff Collins
“HOME SALES REVENUE AT 4-YEAR LOW FOR MONTH”
The total dollars generated from the sale of all Orange County homes fell last month to the lowest level for a September since 2007. The combined value totaled $1.19 billion. That is down $93.6 million or 7.3 percent 

ORANGE COUNTY REGISTER REAL ESTATE SECTION 10/23/2011
Jeff Collins
“SHORT SALES, LOSSES WEIGH ON PRICES”
Market insiders had envisioned that the housing market would be well on its way to recovery by now. 

Instead, it remains mired in the doldrums, with sales and prices hovering only slightly higher than when they hit bottom more than 2 years ago…

Here’s one possible reason why: On average 4 out of every 10 Orange County homes sold each month is either a Bank-owned property or a short-sale. These distressed properties – sold by the most motivated buyers act as a drag on the market, depressing prices.

HOUSINGWIRE 10/17/2011
John Prior
“REO SALES MAY NOT PEAK UNTIL 2013”
The sale of properties repossessed through foreclosure may not peak until 2013, keeping home prices from a meaningful recovery for some time, analysts estimated Monday.

Nearly half of the more than 552,000 REO properties liquidated in the first half of 2011 were held by private banks. In the years ahead, the government

In 2013, REO sales could reach 1.48 million properties, according to estimates from Bank of America Merrill Lynch analysts, a 10% increase from projected amount in 2012.

"We do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller," BofAML analysts said. "But home prices are starting from a negative point, so the implication is that home prices will continue to decline as the foreclosures transition through the pipeline."

Total REO liquidations wouldn't drop below 1 million until 2015, according to BofAML.