REALTOR® Magazine-Daily News-Big Rebound in Existing-Home Sales
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Saturday, October 24, 2009
Fewer short sales are coming up short
Wednesday, October 21, 2009
That transaction, in which borrowers sell their house for less than they owe, has earned a reputation as a frustrating morass with banks taking weeks or months to respond to offers and then often rejecting them. Because lenders swallow a loss on short sales, they have the ultimate say.
But now real estate professionals and banks say the logjam is starting to ease, with decisions coming more quickly, more short sales trading hands, and the prospect of a new Treasury plan that will further lubricate the process.
"A year ago I wouldn't touch a short sale," said Kevin Kieffer, a Realtor with Keller Williams Realty in Danville. "It would be random prices banks wouldn't agree to, you would be tied up six months hoping to get a property sold. But now we're seeing banks up front negotiating prices and giving us criteria. They're getting creative to make things move."
An analysis of Multiple Listing Service records by Emeryville's ZipRealty shows that short sales indeed are gaining ground.
From last September through March, about 600 short sales were completed in the nine-county Bay Area each month, accounting for about 9 percent of existing-residence sales. The monthly short sales topped 700 in April and May and has hovered around 900 to 1,000 a month since then, putting it at about 14 percent of sales. (Zip said the actual numbers may be higher, as not all short sales are flagged as such in the MLS.)
Cindi Hagley, a broker-associate with Windermere Welcome Home in San Ramon, said many banks are getting faster in rendering decisions on short sales, but others still take three or four months.
"The larger banks are coming to the table," she said. "My gut feeling is that short sales seem to be the preferred avenue for distressed property now. It's cheaper for them to do a short sale than go all the way to foreclosure."
For homeowners, a short sale provides a more dignified transition than a foreclosure - and will allow them to return to homeownership sooner. Fannie Mae, for instance, requires at least a five-year wait after a foreclosure but only two years after a short sale - and less if the homeowner wasn't delinquent.
Short sales are also better for the neighborhood because the home stays occupied instead of becoming a vacant foreclosure that may attract crime. And for banks, short sales let them skip the expense and time of going to foreclosure.
Several developments are helping to expedite the sales:
-- Pre-approval. Some banks are proactively deciding what amount they will accept for a short sale house. Sometimes they reveal the amount; sometimes they don't, but either way it expedites the process. Homes with this arrangement are listed as "Lender pre-approved short sale."
"It's an internal reserve price that lets us know the floor we'll accept on a short sale," said Dave Sunlin, senior vice president for foreclosures and real estate at Bank of America, which doesn't reveal the price for competitive reasons.
Considering options
At Wells Fargo, Ben Windust, senior vice president of default operations, said the bank is testing various short-sale approaches, including pre-approved sale amounts that it does reveal. That pilot is only for homes that Wells owns in its portfolio; homes owned by investors require more complex decision-making.
-- Proactive discussion with homeowners. Windust said another Wells pilot is to monitor real estate listings. "If we see we have a (Wells Fargo) borrower who listed property, if it's underwater, we might proactively reach out to them to work with us now on a short sale."
Similarly, JPMorgan Chase spokesman Gary Kishner said, "We are working on a more proactive approach to short sales by obtaining a listing of our delinquent borrowers who have their property listed for sale and then reaching out to help them sell the property."
Wells, Chase and other banks said it benefits homeowners to let their banks know early on that they want to pursue a short sale so the home's value, paperwork stream and other factors can be determined.
-- Treasury plan. In May the Treasury Department said it would offer a streamlined framework for short sales and incentive payments of $1,500 to homeowners, $1,000 to loan servicers and $1,000 to second-lien holders. That plan is supposed to be implemented very soon.
"As we understand it, it allows lenders to work with borrowers to mutually agree on how to market the property, set the price for it, gives us a fixed amount of time to sell the property and if not, converts it into a deed in lieu of foreclosure," said BofA's Sunlin.
-- Technology and staffing. BofA said it recently adopted a Web platform called Equator (formerly REOTrans) for managing short sales, as well as bulking up its short-sale staff.
But despite the progress, many short sales are still exasperating.
"Four of our offers are still out there in home-buying purgatory also known as the short sale," said first-time home buyer Travis Shinkle of Fairfield. He and wife Kasey made some of those offers as far back as May and the homeowner accepted them - but they're still waiting to hear from the banks.
Still obstacles
And even when there is progress, it doesn't always sound like it.
"Before you'd fax something 10 or 15 times before it would get anywhere," said Janelle Boyenga, a Realtor with Intero Real Estate Services in Los Gatos. "Now you only have to fax it in three or four times. And banks are ambiguous when they call: They said I could get back to you in an hour or in a month."
E-mail Carolyn Said at csaid@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/21/BUOG1A5M2P.DTL
This article appeared on page C - 1 of the San Francisco Chronicle
Wednesday, October 21, 2009
Wednesday, October 14, 2009
Wednesday, October 7, 2009
C.A.R. Releases California Housing Market Forecast for 2010
Multimedia:
Click here to view California’s median price from 1970 to 2009.
LOS ANGELES--(BUSINESS WIRE)--“California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said C.A.R. President James Liptak. “This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace.”
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) "2010 California Housing Market Forecast" will be presented this afternoon during CALIFORNIA REALTOR® EXPO 2009 (www.realtorexpo.org), running from Oct. 6-8 at the San Jose Convention Center in San Jose, Calif. The trade show is expected to attract more than 7,000 attendees and is the largest state real estate trade show in the nation.
“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
“Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.
“2009 marked a unique opportunity for first-time home buyers,” Liptak said. “Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide. Now is the time for Congress to extend the federal tax credit and to expand it to all buyers, not just first-timers.”
“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young. “We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer. For the year as a whole, home prices are forecast to reach $280,000.”
“Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” she said.
“The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government,” Appleton-Young said.
Don’t miss “The ‘New Normal’: What Recovery Means in 2010” at the San Jose Convention Center in San Jose, Calif. on Thursday, Oct. 8, from 2:30 p.m. to 4 p.m. Panelists include Richard Green, director of the Lusk Center for Real Estate at the University of Southern California; Glenn E. Crellin, director of the Washington Center for Real Estate Research at Washington State University; and Jack Kyser, chief economist for the Los Angeles Economic Development Corporation. C.A.R. Vice President and Chief Economist Leslie Appleton-Young will serve as moderator.
| 2010 Forecast Fact Sheet | ||||||||||||||||
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009F | 2010F | |||||||||
| SFH Resales | 601.8 | 624.7 | 625.0 | 477.5 | 346.9 | 439.8 | 540.0 | 527.5 | ||||||||
| % Change | 5.1% | 3.8% | 0.03% | -23.6% | -27.3% | 26.8% | 22.8% | -2.3% | ||||||||
| Median Price | $371.5 | $450.8 | $522.7 | $556.4 | $560.3 | $346.4 | $271.0 | $280.0 | ||||||||
| % Change | 17.5% | 21.3% | 16.0% | 6.5% | 0.7% | -38.2% | -21.8% | 3.3% | ||||||||
| 30-Yr FRM | 5.8% | 5.8% | 5.9% | 6.4% | 6.3% | 6.0% | 5.2% | 5.6% | ||||||||
| 1-Yr ARM | 3.8% | 3.9% | 4.5% | 5.5% | 5.6% | 5.2% | 4.8% | 5.2% | ||||||||
Thursday, October 1, 2009
Seeking Real Estate Bargains? Try Looking at the High End
Mainstream Home Prices May Be Rising, But Luxury Properties Still Offer Deep Discounts
By BRETT ARENDS Wall Street Journal
Falling real estate prices are becoming as much a feature of high-end neighborhoods as ocean views, infinity pools and four-car garages.
While the latest data suggests prices for mainstream homes may be stabilizing after several years of pain, the news for luxury homes isn't looking as good.
That's bad news for sellers, naturally, but anyone in the market for a home listed for $2 million or more will find deeply discounted asking prices—and may be able to command even lower prices.
On Tuesday, data from the Federal Housing Finance Agency showed that average home prices ticked up 0.3% nationwide between June and July, including a 1.6% bounce on the west coast. The gains are modest, and they are partly influenced by the season—higher-end homes tend to sell better in late spring and early summer, as families try to move before the school year. Analysts are disappointed the rise was not higher.
Nonetheless, prices have now risen three months in a row. And compared with the disastrous events of the past few years, anything other than Armageddon is apt to raise spirits.
But these numbers only relate to homes purchased with conforming loans backed by the FHFA—in most areas, that describes mortgages of up to $417,000, or up to $713,000 in the country's most expensive regions.
View Full Image
ROI23
Bloomberg News
A stone patio surrounds the pool outside a spec home at 38 French Road in Greenwich, Conn. The city is seeing the worst home-sales market—and deepest discounts—in decades.
ROI23
ROI23
That overlooks luxury and high-end homes, where the outlook remains bleak.
"I would say we're 40% off 2007 prices for everything," says broker Chad Rogers, who covers the area from Malibu to Hollywood Hills for Hilton & Hyland, a Beverly Hills real-estate firm. "We're now seeing prices consistent with where we were back in 2003."
"The $10 million to $30 million properties are on the market for a very long time," says Cathy Wood, a real estate broker covering Beverly Hills and surrounding areas for realty firm Gibson International. "They're seeing a lot of price reductions."
Realtors, she says, "are now selling $500,000 condos, when they used to sell $5 million homes."
Across the country in hedge-fund haven Greenwich, Conn., local broker Eric Bjork at Prudential Real Estate finds a similar effect. "There's a new level of value being set," he says. "The $8 million [homes] are selling for $6 million, and the $10 millions are selling for $8 million. When you do the math, it looks like an adjustment of 20% to 30%."
You'll find similar anecdotal data in several high-end markets. But real estate Web site Trulia.com, which tracks listing prices on multiple listing services across the country, took a look at what's happening to listing prices for homes over the $2 million mark.
Such homes only account for about 2% of the properties listed on the site, but represent 25% of the total price reductions by value. Overall, sellers listing homes for more than $2 million have dropped their asking prices by a total of $7 billion, with an average price reduction of 14%. The average for all properties tracked by Trulia is only 10%.
Data for individual Zip codes is intriguing, whether you're in the market or you just like to rubberneck. According to Trulia data, 28% of the homes currently for sale in Beverly Hills (Zip code 90210) have dropped their price, with an average discount of 11%. In Aspen, Colo., (81611), 39% of the homes have cut their price, by an average of 16%.
On New York's Upper East Side (10065), no less than 40% of the homes have slashed prices—and by an average of 18%. In California, some of the most exclusive areas in Newport Beach, Big Sur and Monterey have seen a third of the sellers reduct prices, by an average of about 15%. Malibu? More than half have cut prices.
Chip Case, economics professor at Wellesley College and one half of the Case-Shiller index duo, says that some of these markets may be finally catching up to the wider housing market crash. "That level was more in the hold-out category," Mr. Case says. "Up until recently the foreclosures weren't hitting that level .But they are now. There's no question about that. You're seeing some contagion from the prime level to the luxury end."
Bottom line: At the high end, it's a good time to be shopping for that dream home.
During—and after—a bubble, investors often hope that "quality assets" will hold value. It's usually a vain hope. Just ask people who owned luxury condos in Tokyo after 1990, or investors in Cisco Systems (CSCO) after the tech-stock bubble popped. Real estate is not that different.
Sooner or later, even rich homeowners need to sell. They get divorced. Their company collapses. They relocate or retire. And, when they get tired of waiting, they cut their price. Factoring in taxes, upkeep and the opportunity cost of keeping money in a non-performing asset, an empty luxury home may be costing owners a lot just by sitting there. That gives them a powerful incentive to make a deal.
Search for Homes in LA
By BRETT ARENDS Wall Street Journal
Falling real estate prices are becoming as much a feature of high-end neighborhoods as ocean views, infinity pools and four-car garages.
While the latest data suggests prices for mainstream homes may be stabilizing after several years of pain, the news for luxury homes isn't looking as good.
That's bad news for sellers, naturally, but anyone in the market for a home listed for $2 million or more will find deeply discounted asking prices—and may be able to command even lower prices.
On Tuesday, data from the Federal Housing Finance Agency showed that average home prices ticked up 0.3% nationwide between June and July, including a 1.6% bounce on the west coast. The gains are modest, and they are partly influenced by the season—higher-end homes tend to sell better in late spring and early summer, as families try to move before the school year. Analysts are disappointed the rise was not higher.
Nonetheless, prices have now risen three months in a row. And compared with the disastrous events of the past few years, anything other than Armageddon is apt to raise spirits.
But these numbers only relate to homes purchased with conforming loans backed by the FHFA—in most areas, that describes mortgages of up to $417,000, or up to $713,000 in the country's most expensive regions.
View Full Image
ROI23
Bloomberg News
A stone patio surrounds the pool outside a spec home at 38 French Road in Greenwich, Conn. The city is seeing the worst home-sales market—and deepest discounts—in decades.
ROI23
ROI23
That overlooks luxury and high-end homes, where the outlook remains bleak.
"I would say we're 40% off 2007 prices for everything," says broker Chad Rogers, who covers the area from Malibu to Hollywood Hills for Hilton & Hyland, a Beverly Hills real-estate firm. "We're now seeing prices consistent with where we were back in 2003."
"The $10 million to $30 million properties are on the market for a very long time," says Cathy Wood, a real estate broker covering Beverly Hills and surrounding areas for realty firm Gibson International. "They're seeing a lot of price reductions."
Realtors, she says, "are now selling $500,000 condos, when they used to sell $5 million homes."
Across the country in hedge-fund haven Greenwich, Conn., local broker Eric Bjork at Prudential Real Estate finds a similar effect. "There's a new level of value being set," he says. "The $8 million [homes] are selling for $6 million, and the $10 millions are selling for $8 million. When you do the math, it looks like an adjustment of 20% to 30%."
You'll find similar anecdotal data in several high-end markets. But real estate Web site Trulia.com, which tracks listing prices on multiple listing services across the country, took a look at what's happening to listing prices for homes over the $2 million mark.
Such homes only account for about 2% of the properties listed on the site, but represent 25% of the total price reductions by value. Overall, sellers listing homes for more than $2 million have dropped their asking prices by a total of $7 billion, with an average price reduction of 14%. The average for all properties tracked by Trulia is only 10%.
Data for individual Zip codes is intriguing, whether you're in the market or you just like to rubberneck. According to Trulia data, 28% of the homes currently for sale in Beverly Hills (Zip code 90210) have dropped their price, with an average discount of 11%. In Aspen, Colo., (81611), 39% of the homes have cut their price, by an average of 16%.
On New York's Upper East Side (10065), no less than 40% of the homes have slashed prices—and by an average of 18%. In California, some of the most exclusive areas in Newport Beach, Big Sur and Monterey have seen a third of the sellers reduct prices, by an average of about 15%. Malibu? More than half have cut prices.
Chip Case, economics professor at Wellesley College and one half of the Case-Shiller index duo, says that some of these markets may be finally catching up to the wider housing market crash. "That level was more in the hold-out category," Mr. Case says. "Up until recently the foreclosures weren't hitting that level .But they are now. There's no question about that. You're seeing some contagion from the prime level to the luxury end."
Bottom line: At the high end, it's a good time to be shopping for that dream home.
During—and after—a bubble, investors often hope that "quality assets" will hold value. It's usually a vain hope. Just ask people who owned luxury condos in Tokyo after 1990, or investors in Cisco Systems (CSCO) after the tech-stock bubble popped. Real estate is not that different.
Sooner or later, even rich homeowners need to sell. They get divorced. Their company collapses. They relocate or retire. And, when they get tired of waiting, they cut their price. Factoring in taxes, upkeep and the opportunity cost of keeping money in a non-performing asset, an empty luxury home may be costing owners a lot just by sitting there. That gives them a powerful incentive to make a deal.
Search for Homes in LA
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