"Many More Foreclosures hitting market soon" - NEW LA TIMES Article

Hi Everyone-

I'm back in action again! I took a little time off from updating my blog for a month or so to take a much needed "web" sebatacle, and also focus on some of the current business in the neighborhood. The rest was well needed after a whirlwhind of activity due to the expiration of the $8000 tax credit deadline in April (April-May was a busy months with many sales. whew!). Anyhow, here is a great article from LA Times released today with update on what to expect regarding foreclosure market coming up.

-Jerry
310-228-8856

Foreclosure Sales Decline, but Housing Recovery still has Far to Go.
Though fewer distressed properties changed hands in the first quarter, many more are in the pipeline, data firm RealtyTrac says.

By Alejandro Lazo, Los Angeles Times
June 30, 2010

Fewer bank-owned homes and properties in foreclosure sold in the first three months of 2010, according to a report released Tuesday. But experts said the nation's housing market will remain troubled for years to come.

A total of 232,959 U.S. homes that sold in the first quarter were either bank-owned or in some stage of the foreclosure process. That's a 14% decrease from the prior quarter and a 33% decline from a peak in the first quarter of 2009, according to Irvine-based RealtyTrac.

Those distressed properties made up 31% of all previously owned homes sold in the U.S. in the first quarter, RealtyTrac said. And while the number of homes sold in foreclosure has declined this year, the housing market probably won't return to a more normal state until the second half of 2013 as foreclosure activity by banks remains elevated, said Rick Sharga, RealtyTrac senior vice president.

"It is a much longer recovery cycle than we have seen in housing," Sharga said. "But the boom was also unprecedented."

In California, 59,823 distressed homes sold in the first quarter, a 21% decline from the prior quarter and a 47% drop from the first quarter of 2009. In Los Angeles County, 10,823 distressed homes sold, a 22% decline from the prior quarter and a drop of 41% from the first quarter of 2009.

Prices of foreclosed homes are getting slightly cheaper. The average sale price for a foreclosed home in the U.S. was $171,971 in the first quarter of 2010, a 1% decline from the fourth quarter of 2009 and a 3% decline from the first quarter of 2009.

More housing inventory from foreclosures probably is on the way. Although fewer people appear to be entering foreclosure, banks stepped up their repossession of homes at a record pace in the first quarter, according to RealtyTrac.

The rise in property seizures by banks was attributed to the expiration of several moratoriums on foreclosures last year and the failure of the Obama administration's effort to provide widespread permanent mortgage relief for borrowers.

alejandro.lazo@latimes.com

Copyright © 2010, The Los Angeles Times

May 2010 Median Home Sales for Los Angeles

LA Real Estate Advice: California Home Default Cases Plunge

From Los Angeles Times
A 40.2% drop in the first quarter suggests that the foreclosure crisis is easing.

The California foreclosure crisis appears to be abating, new data show, as the federal government and big lenders step up efforts to keep troubled borrowers in their homes.

Mortgage default notices — the first step toward foreclosure — plunged 40.2% statewide in the first three months of the year compared with the same period in 2009, according to San Diego research firm MDA DataQuick.

Foreclosure sales dropped 1.7% from a year earlier and 16.1% from the last three months of 2009, DataQuick said Tuesday.

The numbers suggest that the housing market won’t be flooded by a fresh wave of bank repossessions, which had been seen as a major threat to the market’s recovery.

“It is surprisingly good news,” said Gerd-Ulf Krueger, principal economist at Housingecon.com. “There is still a lot of supply lurking out there, but at this point, it looks like it is pretty much under control.”

Stuart A. Gabriel, director of UCLA’s Ziman Center for Real Estate, said the declining foreclosure numbers are “consistent with a broad range of indicators that are suggestive of not only a healing economy but the beginning of healing in the housing market.”

Southern California home prices jumped 14% in March from the same month a year ago, to a median $285,000.

Even so, economists note that further gains statewide are jeopardized by continued high unemployment, particularly in the Inland Empire and the Central Valley.

Foreclosure activity remains concentrated in these inland areas, which suffer from above-average unemployment. DataQuick said mortgages were most likely to go into default in Merced, Stanislaus and San Joaquin counties. Conversely, defaults were least likely in the Bay Area counties of Marin, San Francisco and San Mateo.

“In coastal California, things are looking pretty decent,” said Richard Green, director of the USC Lusk Center for Real Estate. “I still think if you get into the Inland Empire, Fresno, Bakersfield, Modesto, people are really struggling because the unemployment rate is so high — so that people just need help to get out from under.”

California loan default notices peaked at 135,431 in the first quarter of 2009. Since then, the federal government has put increasing pressure on banks to work with homeowners behind on their payments. At the same time, experts say, banks have recognized that flooding the market with foreclosures weakens the value of the properties they have taken back and must resell.

Nestor Fabian, 44, and his wife, Ada, 41, are among those who are hoping for a break from their lender.

The couple bought a four-bedroom, three-bath home in Victorville in 2006 and said they owe Wells Fargo Bank about $305,000 on a property they believe is worth about $128,000. Ada lost her job at a Mervyn’s store about two years ago and has since been jobless.

“I feel like a prisoner in my home,” said Nestor Fabian, an audio technician who commutes to Pasadena. “Basically, I am asking for any peanuts they can give me.”

Fabian is trying to arrange a lowered mortgage with Wells Fargo through the Obama administration’s $75-billion effort to help troubled borrowers.

While the Fabians are hoping for relief, many others are still losing their homes. Paula Murray, 65, and her husband, Roger, 58, lost their Apple Valley home to a foreclosure sale in January. They are scrambling to find an apartment before they are evicted June 1.

But it isn’t easy, Paula Murray noted, because both she and her husband are unemployed and the foreclosure has damaged their credit rating.

“It hurts me because the government gives all this money to these big rich guys to bail them out, bails out the banks, but the little guy can’t get bailed out,” Murray said.

In March, the Obama administration unveiled measures aimed at getting lenders to reduce principal balances on problem mortgages and refinance “underwater” borrowers, those who owe more on their home than it is worth. Another provision would allow many unemployed homeowners to get three to six months of reduced mortgage payments while they look for a job.

Kevin Stein, associate director at the California Reinvestment Coalition, said that although the program has added some uniformity to efforts to modify loans, it remains fundamentally flawed.

“Its main limitation is it continues to rely on voluntary participation and financial incentives for the banks to do what it is we all want them to do, which is work with families to avoid foreclosure,” Stein said.

Foreclosures may also be slowing because banks are deliberately putting fewer homes on the market, experts said. It’s now taking homes about 7.5 months on average to go from a default notice to a foreclosure sale. A year ago, it was 6.8 months, according to DataQuick.

“They may be a little bit reluctant to put homes on the market all at one time,” said Celia Chen, a housing economist with Moody’s Economy.com. “I also think the process is lengthy and there are many homes in the foreclosure process, and so the process may just be clogged up.”

Across California, 81,054 borrowers received a notice of default in the first quarter of this year, down 4.2% from 84,568 in the fourth quarter of 2009. It was the fourth straight quarter in which default notices declined.

There were 42,857 foreclosure sales, a decrease of 16% from 51,060 in the fourth quarter of 2009 and 1.7% from 43,620 in the same period a year ago.

Source: Los Angeles Times

2010 Pico Area Market Snapshot/NewHomesLA.com Recent SALES

CLICK SNAPSHOT FOR RECENT SALES BY JERRY IN PICO: Mar. 2009-2010

California Rebound Boosts 20-city Home Price Index

LOS ANGELES — A surprisingly strong rebound in California's real estate market helped lift a key home price index for the eighth month in a row.

That's good news for people who plan to sell their homes this spring. Prices are now up almost 4 percent from the bottom in May 2009, but still almost 30 percent below the May 2006 peak.

Prices rose 0.3 percent from December to January on a seasonally adjusted basis, according to the Standard & Poor's/Case-Shiller 20-city home price index released Tuesday. Prices increased in 12 cities in the index.

The biggest monthly gain was in Los Angeles, where prices rose 1.8 percent from December. And real estate agents say there's a distinct sense the worst of the downturn is over.

Buyers are "seeing that prices are creeping up," said Tony Middleton, a real estate agent with ZIP Realty who concentrates on the San Fernando Valley. "They're losing bids on homes and they have to bid again."

Prices in San Diego, meanwhile, rose by almost 0.9 percent. Phoenix had the third-largest gain at 0.8 percent.

Compared with the same month last year, the 20-city index was off just 0.7 percent from last year at a reading of 146.32. That was the smallest decline in almost three years and in line with analysts' expectations, according to Thomson Reuters.

Rising home prices also could boost consumer optimism. For most Americans, their home is their largest asset, so as values climb from the depths of the housing bust, homeowners feel wealthier and more comfortable spending. And, for homeowners who owe more on their mortgages than their properties are worth, rising prices rebuild equity.

Consumer confidence rebounded in March after a February plunge, according to a survey released Tuesday. The Conference Board's Consumer Confidence Index rose to 52.5 in March, recovering about half of the nearly 11 points it lost in February.

Still, shoppers remain cautious and there are signs that last year's housing rebound won't last. Home sales sank during the winter, and government incentives that have propped up the market are ending.

Another reason for the positive news is simply that the Case-Shiller index measures a three-month average of home prices. So January's report included November's strong home sales.

However, bargain-hunting homebuyers continue to pack open houses in California, often facing off with investors for foreclosed homes.

"We're seeing multiple offers in most of the markets here in the San Francisco Bay area," said David Kerr, an agent with ZipRealty in Oakland, Calif. "People are getting off the fence."

In February, bank-owned properties made up 44 percent of all resales in the state, according to MDA DataQuick. In Southern California, they accounted for more than half of resales.

With such high demand, supply is dwindling, driving prices higher.

Meanwhile, the state's unemployment rate has flat-lined of late, and that's made buyers more comfortable about purchasing a home than they were just six months ago, said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California.

California home sales will likely get a boost in coming months thanks to a new serving of government stimulus.

Last week, state lawmakers enacted a tax credit of up to $10,000 for homebuyers that kicks in May 1. The state allotted $100 million for first-time buyers and another $100 million to anyone who buys a newly built home. California had a round of tax credits last year that proved to be popular; that program ended in July.

The latest incentive picks up where a federal first-time homebuyer tax credit of up to $8,000 is scheduled to leave off when it expires at the end of April. Should the Obama administration extend the federal tax break, that could give homebuyers in California even more reasons to buy.

Still, there remain pockets of weakness. Sales of homes priced above $500,000 are sluggish. And despite rising prices, more than one-third of all homeowners with a mortgage still owe more on their loans than their homes are worth, according to First American CoreLogic.

Among the cities showing monthly price declines in January, the biggest drop was in Portland, Ore., where prices fell 1.8 percent from December. Chicago and Seattle saw declines of 1.7 percent, while prices in Atlanta fell 1.5 percent.

Many analysts expect the Case-Shiller 20-city index will again turn downward in the coming months as more foreclosures in other states hit the market.

"It is only a matter of time before the index records a double-dip in prices," wrote Paul Dales, U.S. economist with Capital Economics, who forecasts a 5 percent drop. The market will be tested in the second half of the year, he wrote, when a tax credit that has boosted sales is gone.

The Case-Shiller index measures home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.

Source: The Associated Press.