Bryan & Allison's Real Estate Report - 11/21/13
Here is the latest and greatest in the world of real estate on this rainy Thursday...
Home Prices & Sales
October HomeDex Report
NSDCAR October 2013 HomeDex Reports provide September 2013 housing statistics on North San Diego County and full San Diego County statistics. Following is a snapshot of the September housing report:
SD-area home prices in September rose from 2012 & August
Home prices in the San Diego-Carlsbad-San Marcos area, including distressed resales, increased by 22.1 percent in September 2013 compared to a year ago and rose by 1 percent from August, according to CoreLogic’s September Home Price Index (HPI) report.
Excluding distressed resales, year-over-year prices increased by 18.6 percent in September 2013 compared to a year ago and by 0.7 percent from August, according to the CoreLogic HPI.
'U.S. home prices continued their ascent in September. Average home prices in nearly half the states are now within striking distance of their pre-downturn pricing peaks,' said Anand Nallathambi, president and CEO of CoreLogic. 'We are seeing a slowdown in the rate of price appreciation over the past few months from the rapid pace experienced over the first half of this year. This deceleration is natural and should help keep market fundamentals in balance over the longer-term.'
SD annual home prices up in September; sales down
Home prices in the San Diego metro area are up 22 percent from last year, while sales are down 17 percent, according to RealtyTrac’s September 2013 U.S. Residential & Foreclosure Sales Report.
San Diego residential properties, including single-family homes, condominiums and townhomes, sold at an annualized pace of 50,321 in September, unchanged from August and down 17 percent from September 2012.
The median sales price of San Diego residential properties, including distressed and non-distressed, in September was $410,000, up 1 percent from August and up 22 percent from September 2012.
Distressed properties sold for 25 percent below the median price of non-distressed residential properties.
Short sales accounted for 15 percent of all San Diego sales, and lender-owned (REO) sales accounted for 10 percent.
Institutional investor sales accounted for 6 percent of sales, and all cash sales accounted for 33 percent.
SD housing inventory up in September, CAR reports
California home sales declined for the second straight month in September after rising interest rates and economic uncertainty that put housing demand on hold for buyers. Meanwhile, housing supply conditions continued to loosen up as the housing market entered its off-season, the California Association of Realtors reported.
The median home price of an existing, single-family detached home in San Diego County was $490,130 in September, an increase of 1.6 percent from August and 21.1 percent from September 2012.
Closed escrow sales of existing, single-family detached homes in San Diego County were down 20.5 percent in September from August, and down 6.2 percent from September 2012.
The available supply of existing, single-family detached homes for sale in San Diego County increased to 4.2 months in September, up from 3.4 months in August and down from 4.3 months in September 2012.
The median number of days it took to sell a single-family home in San Diego County increased to 25.5 days in September, up from 24.4 days in August and down from 40 days in September 2012.
US existing-home sales drop 1.9% in September
Americans bought fewer existing homes in September than the previous month, held back by higher mortgage rates and rising prices.
The National Association of Realtors said that sales of re-sold homes fell 1.9 percent last month to a seasonally adjusted annual rate of 5.29 million. That's down from a pace of 5.39 million in August, which was revised lower.
The sales pace in August equaled July's pace. Both were the highest in four years and are consistent with a healthy market.
Mortgage rates rose sharply over the summer from their historic lows, threatening to slow a housing recovery that began last year and has helped drive modest economic growth. But many economists expect home sales will remain healthy, especially now that rates have stabilized and remain near historically low levels. Final sales in September reflected contracts signed in July and August, when rates were about a percentage point higher than in May.
Less than 1% of San Diego-area homes in some stage of foreclosure
There were 3,147 completed foreclosures in the San Diego-Carlsbad-San Marcos area in the 12 months ending in September, according to CoreLogic's September National Foreclosure Report.
The foreclosure inventory as of September represented 0.8 percent of all homes with a mortgage, compared to 1.6 percent in September 2012.
Statewide, there were 52,414 completed foreclosures for the 12 months ending in September. The foreclosure inventory as of September represented 0.9 percent of California's homes with a mortgage, compared to 2 percent in September 2012.
The five states with the highest number of completed foreclosures for the 12 months ending in September 2013 were: Florida (115,000), California (52,000), Texas (43,000), Michigan (40,000) and Georgia (39,000).These five states accounted for almost half of all completed foreclosures nationally.
There were 51,000 completed foreclosures in the United States in September 2013, down 39 percent from 84,000 in September 2012. Completed foreclosures decreasing 0.7 percent, from 51,000 reported in August.
CAR: San Diego reports lowest share of distressed properties in California
San Diego’s share of distressed home sales declined to 4 percent in September, according to the California Association of Realtors (CAR). September’s figure was down from 5 percent in August and 15 percent in September 2012.
Twenty-six of the 38 reported counties in California showed a month-to-month decrease in the share of distressed sales, with San Diego, San Mateo and Santa Clara tied for the lowest share at 4 percent.
The share of equity home sales in California continued to grow in September, now making up more than eight of every 10 home sales, the highest level in nearly six years. The share of short sales fell into the single digits and dropped to levels not seen since January 2009, according to CAR.
The share of equity sales -- or non-distressed property sales -- rose for the 10th straight month, making up more than eight in 10 sales, the highest share since November 2007. The share of equity sales in September increased to 85.8 percent, up from 84.7 percent in August. Equity sales made up 62.7 percent of sales in September 2012.
Statewide, the combined share of all distressed property sales continued to decline in September, dropping to 14.2 percent in September, down from 15.3 percent in August and down from 37.3 percent in September 2012.
Rise in trustee deeds called market 'aberration'
San Diego trustee deeds increased 24 percent in October from September, but local experts say this isn’t the start of a trend.
Trustee deeds — the final step in the foreclosure process, transferring ownership from the delinquent borrower back to the lender or a third party — were filed on 211 properties in October, 24.12 percent higher than in September and 65.35 percent lower than October 2012, according to the San Diego County Assessor's Office.
“I have no reason to believe that the aberration upward is the start of a trend. It's just a fluke. Both the trustee sales and NODs are typical of a normal market — I have data back to 1990,” Alan Nevin, director of economic and market research at Xpera Group, said in an email.
The increase in trustee sales is attributed to what’s being processed, said Nathan Moeder, principal at The London Group, in an email. “Any monthly movements are statistical blips until a larger trend presents itself,” Moeder said, adding that the year-over-year trend is more significant.
Notices of default (NODs) — which initiate the foreclosure process by registering that a borrower is behind in payments — decreased 3.02 percent from September to October, and fell 44.84 percent from October 2012 to October 2013. Lenders issued NODs to 642 borrowers in October, down from 662 in September and down from 1,164 in October 2012.
“We have burned off most of the distressed properties and now are moving into a more normal pattern of just personal distress, not market driven,” Moeder said.
He said he expects NODs to remain around this level. “The No. 1 reason for defaults was being laid off from work,” Moeder said. “We are not losing jobs anymore, although not creating as many as we should. But the distress is at a normal level because the job market has stabilized.”
Looking to 2014, Moeder said he expects to see more of the same, including a slight decrease in NODs and trustee sales, but not as steep a change as seen from 2012 to 2013. “I expect housing prices to increase — particularly in the coastal markets that have recovered and now have buyers being aggressively active again,” Moeder said.
Nevin said he expects foreclosures and NODs to remain very low in 2014, because most of them were related to loan originations from 2005 to 2007. “The foreclosure/NOD rate for loans created since then have been negligible because traditional loan-approval terms have been in place and home values have been rising,” Nevin said. “We are in a period of normalcy that will certainly carry through in 2014.”
California foreclosure starts down 39% in 3rd quarter
Foreclosure starts in California decreased 59 percent in the third quarter compared to the third quarter in 2012, according to RealtyTrac’s U.S. Foreclosure Market Report for September and the third quarter of 2013.
A total of 20,250 California properties started the foreclosure process in the third quarter, down 21 percent from the second quarter.
In San Diego, trustee’s deeds were filed on 170 properties in September, 2.3 percent fewer than in August and 69 percent fewer than September 2012, according to the San Diego County Assessor office. Lenders issued notices of default to 662 borrowers in September, an increase of 10.1 percent from August and a decrease of 46.6 percent from September 2013.
Delinquency study indicates housing is nearing pre-crisis norms
Delinquency and foreclosure data reveals the housing market is heading back to pre-crisis norms, according to the Mortgage Bankers Association’s National Delinquency Survey. The percentage of home loans in delinquency or foreclosure was 9.75 percent as of the third quarter, the lowest level in about five years, according to the trade group’s report.
“We are now back to pre-crisis levels by almost any measure,” said Mike Fratantoni, MBA’s VP of research and economics, during a press conference Thursday morning.
Jay Brinkmann, chief economist and SVP for research and education, noted “major drops across the board in all types and categories with a few minor exceptions” are evident in the latest survey results.
Other News & Information
Recovering housing market to spur economic recovery in New Year
Next year will likely be the first year since 2000 that home purchases outpace refinances, according to Freddie Mac’s expectations. Furthermore, the rallying housing market should set the broader economy on a brighter path, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for November.
“Led by a resurgent housing sector, 2014 should shape up to be better than 2013,” Freddie Mac stated in its outlook. Housing starts, which have been slow, should rise to a pace of about 1.15 million in 2014, according to Freddie Mac.
This is more in line with the historical average of 1.1 million per year reported by the Census Bureau. In comparison, the Census Bureau recently reported household formation over the first three quarters of this year at just 380,000.
Freddie Mac expects home sales to increase 5 or 6 percent in the new year, but tight inventory will prevent further increases.
Home values will continue to increase, albeit at a slower pace. Freddie Mac expects home price growth to be about the same as home sales growth—5 or 6 percent.
Rental prices will also continue to rise, but like housing prices, their pace will moderate. Freddie Mac expects rents to rise at a pace of about 5.3 percent next year.
Report: New wave of delinquencies from ARM resets unlikely
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