You might have heard in the news in the past few months something about how we as a nation have found ourselves in a rough economic patch lately. Either that, or you've been living in a cave. Kidding aside, I think that almost all of us know someone in dire financial straits these days. There's a lot of that going around. People have been getting laid off, small business owners are struggling with declining revenues - it's tough out there. Some of these folks are having trouble with their mortgage payments every month. That's what today's post is about.
One of the things that always seems to pop up in an economic downturn are opportunists. That's not always a bad thing. For instance, the big decline that we've seen in housing prices, while painful to many, has opened up home ownership to more people that could never have achieved that goal in the past. It has also opened up an opportunity for investors looking for someplace besides the stock market to put their money (that would include Diane & me).
Unfortunately, there are also some vultures trying to take advantage of people who are already having trouble enough staying afloat. One of the things that we've been seeing a lot of are companies that have sprung up to "help" people modify their home loans. You might have seen some ads for them in various media outlets, including the internet. What some of these folks have been doing is taking money up front for their services, and then not delivering on their promises. I sometimes think that the background music for their ads ought to be the Steve Miller Band's "Take the Money & Run".
Here are a couple of quick tips for you if you or someone you know is looking for this kind of assistance:
1) Do not pay anybody money in advance, with the possible exception of a nominal amount to run a credit report. If they are legitimate, they will have things set up so that any advance fees for services are placed into a legitimate escrow account with a licensed escrow company, and they only get paid after your loan modification is complete.
2) Check them out. One source for checking on them is the California Department of Real Estate's website. They have a page showing companies and brokers who have submitted their advance fee agreements to the DRE and have had them approved (click here). This doesn't guarantee that they will be effective, but at least they are supposed to be playing by the rules, and they are subject to regulatory oversight. They also have a link on that site to companies and brokers that the DRE has slapped with a "desist & refrain order". If the company you are talking to is on that list, you might want to look elsewhere for a solution.
Our Realtor community recently had a presentation from from Cabrillo Economic Development Corporation on the services that they offer to homeowners. They are a non-profit organization that helps people with home ownership, including counseling for new and prospective home buyers. One of the services that they offer is helping existing homeowners in distress work through the loan modification process with their lenders. If you know somebody who might need help, go to their website, or call their Santa Maria office at 614-0267.
Not everybody can be helped out of this mess. But some can, and it's worth the effort. Just be careful not to dig yourself further in a hole trying to get out.
Saturday, May 30, 2009
Monday, May 25, 2009
Monday Morning Numbers 5/25/09
Good morning! Hope everybody is having a good three day weekend. And I hope that at some point today, you stop and think about what this holiday represents. Hint: it ain't about cookouts and ballgames. That's not to say that we shouldn't enjoy those things; I think it would dishonor the memory of the men and women we remember with this day not to live the lives they fought and died for us to be able to live. So enjoy the day - I plan on doing that myself. But just take a little time to remember them and contemplate their sacrifices.
Enough said - let's take a look at this week's numbers:
Active Listings: 93
Contingent Listings: 38
Pending Listings: 66 (33.5% of the inventory)
Price changes for the past week: 7 (5.3%)
Click here for the up to date price per square foot chart.
I think I mentioned a few weeks ago that we were approaching a point where our combined pending and contingent listings would outnumber our active listings. Well, we got there this week. Our active listings dropped off sharply this week, and pending listings continued their climb.
Later this week I'll post about loan modifications.
Enough said - let's take a look at this week's numbers:
Active Listings: 93
Contingent Listings: 38
Pending Listings: 66 (33.5% of the inventory)
Price changes for the past week: 7 (5.3%)
Click here for the up to date price per square foot chart.
I think I mentioned a few weeks ago that we were approaching a point where our combined pending and contingent listings would outnumber our active listings. Well, we got there this week. Our active listings dropped off sharply this week, and pending listings continued their climb.
Later this week I'll post about loan modifications.
Thursday, May 21, 2009
Focus On Short Sales
OK, this isn't going to slip by two weeks in a row...
Back in February, I posted an intro to what short sales are all about, and gave you some stats on how that segment of the market had been doing (click here). It's been a few months since I covered it, so let's revisit it today and see what's new in that arena.
The percentage of our total active inventory (including contingent listings) that are short sales is unchanged from 3 months ago - 49%. About 23% of our pending units are short sales. I somehow didn't report on that number in February, but that's up just a little bit from around 20%. One thing that has changed quite a bit this year has been the number of contingent listings. When I originally reported on short sales, we had just seen a big increase in those listings from 15-20 up to about 30-35, and that level has stayed pretty steady since then.
Another big change is the share of sold listings. In the first quarter of the year, 14.8% of the sold units were short sales, up from 10.6% from 4Q 2008 and 7.7% for 2008 as a whole. What's been happening is that as our inventory has shrunk, and REO properties have been coming on the market at a slower pace, a big chunk of what's left are short sales. You wanna buy a house in Lompoc today? You're going to have to at least consider some short sales.
Something that hasn't changed, and probably won't anytime soon - you need a lot of patience to go through one of these deals, both as a buyer and a seller. Let's not even talk about how much patience it takes for those of us in the industry. It's a white knuckle ride a lot of the time. But hey, the way I look at it, I like me a good roller coaster now and then. Just hang on tight, and think about the great stories you'll have to tell all your friends later.
I noticed as I went through the February post that I made brief mention of loan modifications as an option for sellers in distress. That sounds like a good topic for next week's "Focus On" post.
Back in February, I posted an intro to what short sales are all about, and gave you some stats on how that segment of the market had been doing (click here). It's been a few months since I covered it, so let's revisit it today and see what's new in that arena.
The percentage of our total active inventory (including contingent listings) that are short sales is unchanged from 3 months ago - 49%. About 23% of our pending units are short sales. I somehow didn't report on that number in February, but that's up just a little bit from around 20%. One thing that has changed quite a bit this year has been the number of contingent listings. When I originally reported on short sales, we had just seen a big increase in those listings from 15-20 up to about 30-35, and that level has stayed pretty steady since then.
Another big change is the share of sold listings. In the first quarter of the year, 14.8% of the sold units were short sales, up from 10.6% from 4Q 2008 and 7.7% for 2008 as a whole. What's been happening is that as our inventory has shrunk, and REO properties have been coming on the market at a slower pace, a big chunk of what's left are short sales. You wanna buy a house in Lompoc today? You're going to have to at least consider some short sales.
Something that hasn't changed, and probably won't anytime soon - you need a lot of patience to go through one of these deals, both as a buyer and a seller. Let's not even talk about how much patience it takes for those of us in the industry. It's a white knuckle ride a lot of the time. But hey, the way I look at it, I like me a good roller coaster now and then. Just hang on tight, and think about the great stories you'll have to tell all your friends later.
I noticed as I went through the February post that I made brief mention of loan modifications as an option for sellers in distress. That sounds like a good topic for next week's "Focus On" post.
Monday, May 18, 2009
Monday Morning Numbers 5/18/09
Good morning, time again for a look at our market stats. I didn't find time for last week's "focus on" post - I was tied up for a big part of it and out of town for a couple of days. Here's what the numbers look like this morning:
Active Listings: 104
Contingent Listings: 35
Pending Listings: 57 (29.1% of the inventory)
Price changes for the past week: 3 (2.2%)
Click here for the up to date price per square foot chart.
Another week without much change in the numbers. We're up to 6.0 months of inventory today, mostly because we've seen sales numbers drop off over the past month or two. You might remember that our pending sales dropped off a bit for a while a month or two ago. With our pending units on the rise again, I expect to see stronger sales in the next month or two, and that inventory stat will probably go back down into the 4-5 month range.
Later this week, I'll try to get that short sale update out. At least I don't think I'm going to be on the road, so that should help...
Active Listings: 104
Contingent Listings: 35
Pending Listings: 57 (29.1% of the inventory)
Price changes for the past week: 3 (2.2%)
Click here for the up to date price per square foot chart.
Another week without much change in the numbers. We're up to 6.0 months of inventory today, mostly because we've seen sales numbers drop off over the past month or two. You might remember that our pending sales dropped off a bit for a while a month or two ago. With our pending units on the rise again, I expect to see stronger sales in the next month or two, and that inventory stat will probably go back down into the 4-5 month range.
Later this week, I'll try to get that short sale update out. At least I don't think I'm going to be on the road, so that should help...
Monday, May 11, 2009
Monday Morning Numbers 5/11/09
Happy day after Mother's Day - I hope all the moms out there were treated well yesterday. Heck, I hope you get treated well today, too. Let's take a look at this week's market stats:
Active Listings: 101
Contingent Listings: 36
Pending Listings: 55 (28.7% of the inventory)
Price changes for the past week: 9 (6.6%)
Click here for the up to date price per square foot chart.
About the only thing changing much this week once again is the number of pending units. We've been seeing a trend over the past few weeks of increasing pending sales, and that continues this week. My first thought when I started seeing this trend was that we would see a decrease in the number of contingent listings, but that's not happening. This looks to me like an increase in buyer activity. We do typically see buyers come out in the spring and summer, but typical has been out the window for a couple of years now.
Later this week, I'm going to revisit short sale activity and update what's been going on in that segment of the market since I first covered it a few months ago.
Active Listings: 101
Contingent Listings: 36
Pending Listings: 55 (28.7% of the inventory)
Price changes for the past week: 9 (6.6%)
Click here for the up to date price per square foot chart.
About the only thing changing much this week once again is the number of pending units. We've been seeing a trend over the past few weeks of increasing pending sales, and that continues this week. My first thought when I started seeing this trend was that we would see a decrease in the number of contingent listings, but that's not happening. This looks to me like an increase in buyer activity. We do typically see buyers come out in the spring and summer, but typical has been out the window for a couple of years now.
Later this week, I'm going to revisit short sale activity and update what's been going on in that segment of the market since I first covered it a few months ago.
Thursday, May 7, 2009
Focus On Mesa Oaks & Country Club
This week, let's take a look at a couple of our established "executive" communities in our market. I'm sure I'd catch some flak for lumping these two areas together, but that's OK I have a thick skin. I like to look at them together because they tend to appeal to the same buyers for the most part, and they historically track pretty well together.
Mesa Oaks built up over a period of a few decades from the early 1970's up until the first half of the 2000's. These homes are pretty much all custom homes on larger lots - typically a third of an acre and up. And they're typically larger than the average Lompoc tract home, ranging from a little under 2000 sq. ft. up to some in the 4000 sq. ft. range.
The Village Country Club community is just what you'd expect from the name - it's built around a golf course. A very pretty golf course at that. I don't play the game, but any time I'm up there and I see that course, I think I ought to take it up. Just what I need - an expensive hobby. Anyway, this community was built up starting in the early 1960's, and mostly the development stopped there in the late 1980's until recently, when a new tract of home began construction. Again, we're looking at mostly large custom homes on large lots up here. For the purposes of this analysis, I'm excluding the "cluster" homes in the Country Club. Those are attached units, and they really don't track well to anything else, and they kind of constitute their own little micro-market.
The price points in these areas are considerably higher than the rest of the Lompoc Valley. As a result, there isn't as much activity here as there is in the market as a whole. What you'll find for the most part is that as prices increase, there are fewer buyers who can pick up those properties, and things tend to move a little more slowly than they do in the entry level.
We have 15 active and 3 contingent listings on the market in these areas today. Not a lot of these are distressed properties, only 3 are REO's and 3 are short sales. There are 4 pending units (one each REO & short sale). Over the past 3 months, sales activity has been light, with only 2 sold units, with no REO's or short sales. 2008 saw 13 sold units in these neighborhoods, and again, the REO and short sale activity was very light, with only 1 REO and no short sales in that period.
So why is this? Why have these neighborhoods not been hit as hard with REO's and short sales as the rest of the market? It's not about the price point. A lot of newer homes also fall into that price range, and we've seen REO activity in those that tracks pretty closely to the rest of the market. I have a theory, so take this for conjecture and not fact: I think that there hasn't been a lot of turnover in these areas over the past 5 or so years. In fact, just from a very non-scientific observation, it seems to me that most of the homes in these areas are occupied by very long term owners, and most of them have likely not done a lot of cash-out refinancing, so not all that many find themselves in trouble with their mortgages.
Partly as a result of the lack of REO activity in these areas, we haven't seen prices drop here quite as much as they have in the market as a whole. Unfortunately, the data points are very thin, especially recently, so putting a solid number on this is especially difficult. It appears from the data that I do have that values have dropped somewhere in the range of 25% over the past year, which is in line with the larger market. But values have dropped about 40% from the peak, which is about 5-10% better than the market averages.
I think that these neighborhoods will recover nicely when things start to turn around. They are both very desirable neighborhoods, and once the housing market recovers value and we have more entry and mid-range level owners with equity, we'll likely see some of them wanting to make the move up to one of these homes.
Next week I'm going to cover... well, I don't know what I'm going to cover. I'll figure that out later.
Mesa Oaks built up over a period of a few decades from the early 1970's up until the first half of the 2000's. These homes are pretty much all custom homes on larger lots - typically a third of an acre and up. And they're typically larger than the average Lompoc tract home, ranging from a little under 2000 sq. ft. up to some in the 4000 sq. ft. range.
The Village Country Club community is just what you'd expect from the name - it's built around a golf course. A very pretty golf course at that. I don't play the game, but any time I'm up there and I see that course, I think I ought to take it up. Just what I need - an expensive hobby. Anyway, this community was built up starting in the early 1960's, and mostly the development stopped there in the late 1980's until recently, when a new tract of home began construction. Again, we're looking at mostly large custom homes on large lots up here. For the purposes of this analysis, I'm excluding the "cluster" homes in the Country Club. Those are attached units, and they really don't track well to anything else, and they kind of constitute their own little micro-market.
The price points in these areas are considerably higher than the rest of the Lompoc Valley. As a result, there isn't as much activity here as there is in the market as a whole. What you'll find for the most part is that as prices increase, there are fewer buyers who can pick up those properties, and things tend to move a little more slowly than they do in the entry level.
We have 15 active and 3 contingent listings on the market in these areas today. Not a lot of these are distressed properties, only 3 are REO's and 3 are short sales. There are 4 pending units (one each REO & short sale). Over the past 3 months, sales activity has been light, with only 2 sold units, with no REO's or short sales. 2008 saw 13 sold units in these neighborhoods, and again, the REO and short sale activity was very light, with only 1 REO and no short sales in that period.
So why is this? Why have these neighborhoods not been hit as hard with REO's and short sales as the rest of the market? It's not about the price point. A lot of newer homes also fall into that price range, and we've seen REO activity in those that tracks pretty closely to the rest of the market. I have a theory, so take this for conjecture and not fact: I think that there hasn't been a lot of turnover in these areas over the past 5 or so years. In fact, just from a very non-scientific observation, it seems to me that most of the homes in these areas are occupied by very long term owners, and most of them have likely not done a lot of cash-out refinancing, so not all that many find themselves in trouble with their mortgages.
Partly as a result of the lack of REO activity in these areas, we haven't seen prices drop here quite as much as they have in the market as a whole. Unfortunately, the data points are very thin, especially recently, so putting a solid number on this is especially difficult. It appears from the data that I do have that values have dropped somewhere in the range of 25% over the past year, which is in line with the larger market. But values have dropped about 40% from the peak, which is about 5-10% better than the market averages.
I think that these neighborhoods will recover nicely when things start to turn around. They are both very desirable neighborhoods, and once the housing market recovers value and we have more entry and mid-range level owners with equity, we'll likely see some of them wanting to make the move up to one of these homes.
Next week I'm going to cover... well, I don't know what I'm going to cover. I'll figure that out later.
Monday, May 4, 2009
Monday Morning Numbers 5/4/09
Good morning, and welcome to another exciting edition of Monday Morning Numbers! Here's what's happening in the Lompoc real estate market today:
Active Listings: 100
Contingent Listings: 38
Pending Listings: 49 (26.2% of the inventory)
Price changes for the past week: 6 (4.4%)
Click here for the up to date price per square foot chart.
About the only thing that changed from the previous week was a slight increase in pending listings. That seems to have been the trend over the past few weeks. Demand remains strong, inventory remains thin. This is not a recording, but sometimes is seems like it might as well be. We have about 5.3 months of inventory on the market today.
A quick look at upcoming REO inventory shows that we have around 40 unlisted bank owned properties that should be hitting the market at some point (that's been a very steady number for a month or so now) and somewhere in the neighborhood of 100 unresolved Notice of Trustee Sale recordings (that number has been edging up). We've been watching Trustee Sales very closely for a couple of months, and the overwhelming majority of scheduled sales are getting postponed repeatedly. At some point, several of those are going to go back to the bank. But for now, I don't see an imminent change in our inventory levels.
The "Focus On" piece later this week will take a look at activity in Mesa Oaks & the Country Club.
Active Listings: 100
Contingent Listings: 38
Pending Listings: 49 (26.2% of the inventory)
Price changes for the past week: 6 (4.4%)
Click here for the up to date price per square foot chart.
About the only thing that changed from the previous week was a slight increase in pending listings. That seems to have been the trend over the past few weeks. Demand remains strong, inventory remains thin. This is not a recording, but sometimes is seems like it might as well be. We have about 5.3 months of inventory on the market today.
A quick look at upcoming REO inventory shows that we have around 40 unlisted bank owned properties that should be hitting the market at some point (that's been a very steady number for a month or so now) and somewhere in the neighborhood of 100 unresolved Notice of Trustee Sale recordings (that number has been edging up). We've been watching Trustee Sales very closely for a couple of months, and the overwhelming majority of scheduled sales are getting postponed repeatedly. At some point, several of those are going to go back to the bank. But for now, I don't see an imminent change in our inventory levels.
The "Focus On" piece later this week will take a look at activity in Mesa Oaks & the Country Club.
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