Real Estate
Pricey Homes and Lots of Them
Fewer sales mean more houses to choose from. Buyers have gained breathing room, if not a lot a great deals.
This is the time when buyers have time to shop and compare and cam make a throughful purchase. It is not like a year ago when buyers were walking around with a check in their pocket and writing offers on the hood of their car.
There were 69,499 single family homes sold in the first three months of the year in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties, according to Dataquick Information Systems, a decline of more than 8% from the same period a year earlier.
Buyers don't have that panicked feeling. 'If I don't buy therefore the post goes up, I'll get into the multiple offers and lose out'
Althogh most buyers are focused on specific neighborhoods and follow median sales prices more closely thatn the price per square foot measurements, real estate agents and idustry analyst say the latter number offers the most reliable snapshot of how a market is performing over a wide area. Homes are also clearly lingering longer on the market. Southern California had a six month supply of homes for sale in January 2005.
The lowest performing zip code in Los Angeles County was 91390 in Santa Clarita, which was still up 7.7% for the same period according to Dataquick
Monday, May 15, 2006
Thursday, May 11, 2006
Real Estate
Foreclosure Activity UP
Softer Appreciation rates drove foreclosure activity to its highest level in two years during the first quarter, including a 19.1% annual spike in Los Angeles County. However foreclosure activity is coming off all time low levels and would have to double or triple to cause market distress, said DataQuick Information Systems.
In the year's first three months, lenders issued 18,668 default notices to California homeowners, up an annual 28.7% and 23.4 increase from the 2005 fourth quarter. The Last time it was this high was the 18,738 notices at the fourth quarter of 2003.
Across the county, 4,211 homeowners received the notices, the first step in the foreclosure process. That's the most since 4,736 in the first quarter of 2004.
By comparison, an average of 11,211 default notices were issued each quarter in the county over the past 14 years. We're coming off the bottom here. We though this would happen stronger, so this is an indicator of a stronger market that we anticipated.
Factors other than appreciation also affect foreclosure activity. They include the amount of equity people have in their property, the type of mortgage, they used and how long they've had that mortgage.
The low point for statewide foreclosure activity came in the third quarter of 2004, when property owners received 12,145 default notices. Activity peaked in the 1996 first quarter which 59,897 notices. Default statistics go back to 1992.
Market watchers have been predicting for months that annual price appreciation rates would narrow and that is now happening.
Statewide, the annual appreciation rate hit a high of 22.8% during the second quarter of 2004. Since then, it's fallen to 12.4% in the first quarter of this year. Only 5% of homeowners who find themselves in default actually lose their homes to foreclosure.
Most are able to stop the foreclosure process by
bringing their mortgage payments current or by selling their home and paying off the mortgage balance.
According to the Deputy Chief Economist at the California Association of Realtors, if this market continues softening the most risk will be faced by relatively new buyers financed with interest only, straight adjustable or other creative loan products.
While the supply of properties for sale increased in the years first two months and helped mitigate the price increases, it fell in March. Inventory is still lean enough to drive price increases, something that will ease the foreclosure risk.
The underlying economic conditions that five rise to large number of foreclosures are really nowhere in sight. You need to have quite a bit of economic distress and we don't expect that over the near future.
Foreclosure Activity UP
Softer Appreciation rates drove foreclosure activity to its highest level in two years during the first quarter, including a 19.1% annual spike in Los Angeles County. However foreclosure activity is coming off all time low levels and would have to double or triple to cause market distress, said DataQuick Information Systems.
In the year's first three months, lenders issued 18,668 default notices to California homeowners, up an annual 28.7% and 23.4 increase from the 2005 fourth quarter. The Last time it was this high was the 18,738 notices at the fourth quarter of 2003.
Across the county, 4,211 homeowners received the notices, the first step in the foreclosure process. That's the most since 4,736 in the first quarter of 2004.
By comparison, an average of 11,211 default notices were issued each quarter in the county over the past 14 years. We're coming off the bottom here. We though this would happen stronger, so this is an indicator of a stronger market that we anticipated.
Factors other than appreciation also affect foreclosure activity. They include the amount of equity people have in their property, the type of mortgage, they used and how long they've had that mortgage.
The low point for statewide foreclosure activity came in the third quarter of 2004, when property owners received 12,145 default notices. Activity peaked in the 1996 first quarter which 59,897 notices. Default statistics go back to 1992.
Market watchers have been predicting for months that annual price appreciation rates would narrow and that is now happening.
Statewide, the annual appreciation rate hit a high of 22.8% during the second quarter of 2004. Since then, it's fallen to 12.4% in the first quarter of this year. Only 5% of homeowners who find themselves in default actually lose their homes to foreclosure.
Most are able to stop the foreclosure process by
bringing their mortgage payments current or by selling their home and paying off the mortgage balance.
According to the Deputy Chief Economist at the California Association of Realtors, if this market continues softening the most risk will be faced by relatively new buyers financed with interest only, straight adjustable or other creative loan products.
While the supply of properties for sale increased in the years first two months and helped mitigate the price increases, it fell in March. Inventory is still lean enough to drive price increases, something that will ease the foreclosure risk.
The underlying economic conditions that five rise to large number of foreclosures are really nowhere in sight. You need to have quite a bit of economic distress and we don't expect that over the near future.
Tuesday, May 02, 2006
Real Estate
Hot Home Market Eases Into Slower Gear
First-quarter numbers are in and the evidence is irrefutable. The real estate market is off to its weakest start in years and the sellers are making big adjustments in therir asking price to fantasy ratio.
For January to March period sales are well undcr year ago levels across the state, Los Angeles County and San Fernando Valley.
Inventory is up, giving buyers more leverage than they've had in years. Inventory levels, also offer a glimpse of what direction prices might take. To find a market this anemic in the Valley we have to go back to 1997.
In this year's first quarter 2,153 previously owned houses changed owners down 22.8% from 2,789 sales in the 2005 first quarter. The last time sales were this week came in the 1997 first quarter, 2,120 single family transactios.
Preliminary numbers from the California Association of Realtors show a similar trend. Statewide sales fell 18.3% from last year first quarter, one that was on a record pace. Los Angeles County sales dropped 19.1%
Prices have stayed in a narrow range since last July, rising from a low of $ 590,000 in September and December to March's high. Lots of market analysts and economists expect prices to behave in this fashion for a while.
There are also ample signs of the inventory build up. Neigborhoods are festooned with the most "For Sale" sales signs in years, some sporting "Price Reduced" tags. Sellers, can no longer slap 20% on top of what their neighbor's house sold for, sit back and wait for the cash to roll in.
The bigger the supply the more downward pressure is exerted on prices. Research found that when inventory levels are seven months or lower, the state media price goes up 11% on average. When inventory streches nine months or more, the median fall on a consistent basis.
March ended with state-wide inventory at 5.2 months. A year ago was 1.8 months. Inventory in the Valley was 3.6 months.
Last March it was 1.2 month supply. The market is going to continue to unwind. Wheter it's more that 10 years worth remains to be seen.
Hot Home Market Eases Into Slower Gear
First-quarter numbers are in and the evidence is irrefutable. The real estate market is off to its weakest start in years and the sellers are making big adjustments in therir asking price to fantasy ratio.
For January to March period sales are well undcr year ago levels across the state, Los Angeles County and San Fernando Valley.
Inventory is up, giving buyers more leverage than they've had in years. Inventory levels, also offer a glimpse of what direction prices might take. To find a market this anemic in the Valley we have to go back to 1997.
In this year's first quarter 2,153 previously owned houses changed owners down 22.8% from 2,789 sales in the 2005 first quarter. The last time sales were this week came in the 1997 first quarter, 2,120 single family transactios.
Preliminary numbers from the California Association of Realtors show a similar trend. Statewide sales fell 18.3% from last year first quarter, one that was on a record pace. Los Angeles County sales dropped 19.1%
Prices have stayed in a narrow range since last July, rising from a low of $ 590,000 in September and December to March's high. Lots of market analysts and economists expect prices to behave in this fashion for a while.
There are also ample signs of the inventory build up. Neigborhoods are festooned with the most "For Sale" sales signs in years, some sporting "Price Reduced" tags. Sellers, can no longer slap 20% on top of what their neighbor's house sold for, sit back and wait for the cash to roll in.
The bigger the supply the more downward pressure is exerted on prices. Research found that when inventory levels are seven months or lower, the state media price goes up 11% on average. When inventory streches nine months or more, the median fall on a consistent basis.
March ended with state-wide inventory at 5.2 months. A year ago was 1.8 months. Inventory in the Valley was 3.6 months.
Last March it was 1.2 month supply. The market is going to continue to unwind. Wheter it's more that 10 years worth remains to be seen.
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