All of the week's happenings in the world of real estate
Rather than post several times this week, I thought it would be best to save all of the news and report it at once time. So, here is a rundown on the week that was in real estate:
- HomeDex report shows mixed results for San Diego County. The HomeDex report, provided by the North San Diego County Association of Realtors, provides insight into housing volume and pricing. To summarize:
- The median price for all North County home sales - attached and detached - decreased to $395,000 in July 2012 compared to $403,000 in June 2012.
- Detached homes in North County decreased by 6.54% in July 2012 to $439,250 compared to $470,000 in June 2012.
- The countywide median SFD price increased 2.01% to $355,000 in July 2012 compared to $348,000 in June 2012.
- The number of North San Diego SFD listings (active and contingent) declined 1.8% in July 2012 compared to June 2012.
- The number of sold North San Diego County SFD units decreased 10.16% in July 2012 compared to June 2012, countering five months of sales increases. Year-over sold SFD units increased 19.79% compared to July 2011, making 14-months of year-over sales increases.
- Median days-on-market for single-family detached homes sold in North County for July 2012 decreased to 44 days compared to 46 days in June 2012.
- DataQuick reports sales and price increases for Southern California. In an article in the San Diego Daily Transcript, DataQuick reported an increase in both median price and sales volume:
- The median price for Southern California homes rose 8.1% in July from the same period last year. The median price is at its highest level since September 2008.
- Sales volume increased 13.8% from last year. It was the seventh straight months that sales climbed from the year-ago level.
- Mortgage delinquencies increase – and decrease - in the second quarter. According to the Mortgage Bankers Association’s National Delinquency Survey, the national delinquency rate, which includes all loans that are at least 1 payment past due but not loans in foreclosure, rose to 7.58%. This was an increase from the first quarter but a decrease from a year ago. The combined percentage of loans in foreclosure or at least 1 payment past due was 11.62%, an increase from last quarter but a decrease from the same period a year ago. This is a welcome sign for homeowners who are trying to make ends meet as well as for the future of the foreclosure market.
- Shadow inventory isn’t as scary as you may think. An article in the Wall Street Journal shed light on the “shadow inventory” issue that is discussed at water coolers throughout the country. The author points out that “shadow inventory” isn’t a national issue – it is focused in certain areas of the country. In addition, home vacancy rate is low so demand is keeping up with supply. The two big questions concerning “shadow inventory” are how one defines “shadow inventory” and how quickly are foreclosures homes being liquidated:
- Some would say that the shadow inventory just includes homes with mortgages that are in foreclosure or are at least 3 months behind. Others would say that it should also include those that are underwater. It’s not very practical to use this figure because those homeowners may receive a loan modification or just might stay in their home. Just because they are underwater doesn’t mean they will necessarily start missing their payments. The positive news is that, as we reported earlier in this post, the national delinquency rate is on the decline overall.
- Banks aren’t dumping foreclosures on the market. That would be counterproductive as it would drive down prices. Instead, they are releasing them at a rate that is keeping up with demand. A subsequent article in the Wall Street Journal talks about how banks’ inventory of homes is actually relatively low. Banks are doing more short sales and are getting rid of homes at trustee sales, selling to investors who rehab the properties and either sell them or rent them. As the delinquency rate continues to decline, the “shadow inventory” will continue to be less of an issue.
- Government support of Fannie Mae and Freddie Mac winding down. In 2008 the federal government took over Fannie and Freddie as the housing crisis was in full bloom. Using taxpayer dollars, the government has pumped nearly $188 billion into Fannie and Freddie. An article in the San Diego Daily Transcript reported that the government is changing the way it supports Fannie and Freddie, taking dividends from them only in quarters when they earn a profit (versus the current way in which they must borrow money from the government to pay dividends in quarters when they are not profitable). This will wind down the government’s holdings in the two entities much more quickly and lead to the goal (shared by the American Bankers Association) of reducing the government’s presence in the national mortgage market. While some fear that this will lead to increased borrowing costs, it is more likely that the private sector will take the government’s place in the mortgage market.
Bryan & Allison Devore
Prudential California Realty
North San Diego County and Carlsbad Real Estate
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