Here we are on Monday morning once again, and all is right with the world. The Cubs took possession of first place in the NL Central yesterday, which makes me a very happy boy. Yeah, yeah, I know, it has nothing to do with Lompoc real estate, but some things just have to be celebrated. Let's take a look at something that does have something to do with our market:
Active Listings: 97
Contingent Listings: 57
Pending Listings: 53 (25.6% of the inventory)
Price changes for the past week: 3 (2.0%)
New listings: 13
Click here for an updated price per square foot chart.
It looks like our inventory is heading back up a bit, as I've been expecting. It probably has a little further to climb, and then I expect to see it level off again. Foreclosure activity has slowed again, at least for the time being, which should keep the active listings down a bit. We are at 6.5 months of inventory this morning, which is a high point for the year so far.
The "Focus On" post later this week is TBD. I might go back to a neighborhood update, or I might come up with another idea. Go Cubs!
Monday, July 27, 2009
Thursday, July 23, 2009
Focus On Mission Hills
It's time to update the activity on Mission Hills homes. Or the lack of activity, maybe. I took a look at this area a few months ago, so go check out that post for some background on the neighborhood.
As of this writing, we have a whopping two active and one contingent property on the market in Mission Hills. All three are distressed sales, with one of the actives being an REO and the other two short sales. We have two pending sales in the neighborhood, one an REO and the other a traditional seller. Our inventory has been thin overall, of course, but it's surreal to see almost nothing on the market up there.
I guess it's kind of surprising, then, to see that we had 7 sold units up there in the second quarter. Of these, 3 were REO's, 2 were short sales, and 2 were traditional sellers. Remember a few weeks ago when I updated REO activity and noted that we had a lot of sales at or above the list price? Quick update to that - 58% of the second quarter sales were at or above list price. But in Mission Hills, all 7 sales were at or above list. All of them. The median days on market up there was 35, but that's kind of skewed by the two short sales. There's a long and wonky explanation for why that is, but if you take those out of the mix, we had a median DOM on Mission Hills sold units of 7. Wow. Only one sold for cash, and the rest were government loans, so we're not seeing a lot of investors picking up homes there recently.
Going forward, I don't see big changes coming anytime soon. I'm only tracking 6 active Notice of Trustee Sales up there at the moment, and what looks like 4 unlisted REO properties. My guess is that people who want to live in the Cabrillo High district and can't afford the Village are jumping all over these homes when they hit the market. Could be a very good thing for home values up there in the short to medium term.
As of this writing, we have a whopping two active and one contingent property on the market in Mission Hills. All three are distressed sales, with one of the actives being an REO and the other two short sales. We have two pending sales in the neighborhood, one an REO and the other a traditional seller. Our inventory has been thin overall, of course, but it's surreal to see almost nothing on the market up there.
I guess it's kind of surprising, then, to see that we had 7 sold units up there in the second quarter. Of these, 3 were REO's, 2 were short sales, and 2 were traditional sellers. Remember a few weeks ago when I updated REO activity and noted that we had a lot of sales at or above the list price? Quick update to that - 58% of the second quarter sales were at or above list price. But in Mission Hills, all 7 sales were at or above list. All of them. The median days on market up there was 35, but that's kind of skewed by the two short sales. There's a long and wonky explanation for why that is, but if you take those out of the mix, we had a median DOM on Mission Hills sold units of 7. Wow. Only one sold for cash, and the rest were government loans, so we're not seeing a lot of investors picking up homes there recently.
Going forward, I don't see big changes coming anytime soon. I'm only tracking 6 active Notice of Trustee Sales up there at the moment, and what looks like 4 unlisted REO properties. My guess is that people who want to live in the Cabrillo High district and can't afford the Village are jumping all over these homes when they hit the market. Could be a very good thing for home values up there in the short to medium term.
Monday, July 20, 2009
Monday Morning Numbers 7/20/09
Good morning! Looks like we're in for another great week here in our little undiscovered corner of California. Good weather ahead, and the dog show rolls into town later this week. Oh, and it looks like I'm going to start having a good crop of cherry tomatoes by about the end of the week. Good times. Anyway, let's take a look at this week's market stats:
Active Listings: 90
Contingent Listings: 52
Pending Listings: 54 (27.6% of the inventory)
Price changes for the past week: 10 (7.0%)
New listings: 11
Click here for an updated price per square foot chart.
Not much change in the numbers this week, with the exception of a pretty big jump in the number of contingent listings. Most of the listings that went contingent last week were REO's, and those don't tend to stay contingent for very long, so I expect to see an increase in pending listings coming in the next couple of weeks. We have 5.8 months of inventory on the market this morning.
Come back later this week, and I'll update Mission Hills activity for you.
Active Listings: 90
Contingent Listings: 52
Pending Listings: 54 (27.6% of the inventory)
Price changes for the past week: 10 (7.0%)
New listings: 11
Click here for an updated price per square foot chart.
Not much change in the numbers this week, with the exception of a pretty big jump in the number of contingent listings. Most of the listings that went contingent last week were REO's, and those don't tend to stay contingent for very long, so I expect to see an increase in pending listings coming in the next couple of weeks. We have 5.8 months of inventory on the market this morning.
Come back later this week, and I'll update Mission Hills activity for you.
Wednesday, July 15, 2009
2009 Second Quarter Update
Another quarter goes in the books, and it was kind of a mixed bag as far as news on the local real estate front goes. When I started breaking down the quarter, two things jumped out at me in a big way, so let's get right after those two things, and then I'll entertain and amaze you with a few interesting factoids about the quarter's activity.
First big news item: After a very robust first quarter in terms of sales volume, we saw a steep decline in the number of units sold compared to the same quarter in 2008. We had 76 total sold units for the quarter, which was down 27.6% from the 105 units that we had in 2Q 2008. I've been touch on this in my Monday Morning Numbers posts for a little while. I think that this is in great part due to a lower inventory level. I can't track a number for it, but from observation and talking to the other agents in town, I can tell you that buyer activity hasn't slowed down. Heck, I'd bet that there were more offers written in this quarter than have been written in any quarter in recent years. It's just that so many properties get tons of offers. I think that the slowdown in the number of sold units owes more to thin inventory than anything.
Second big news item: Click here for an updated price per square foot chart. After 6 consecutive quarters of what can only be described as freefall, our prices are virtually unchanged for the second quarter in a row. This is huge, in my opinion. We had a couple of relatively flat quarters back in 2007, but things were a little different then, and the buyer activity wasn't nearly as strong as it is now.
A few disjointed observations on the second quarter:
REO's comprised 55.3% of the sold units. This is down from 67.1% in the first quarter, and is probably a result of fewer foreclosures coming on the market. We're going to start seeing a few more REO listings coming on the market, so I expect that number to return to the 65% range in the coming months.
Short sales continue to take a bigger percentage of the market, with 17.1% of the quarter's sales. This is up from 14.6% in the first quarter, and is the highest it's been in this cycle.
The "Wow!" of the quarter for my money: 21.1% of our sales in the quarter were cash deals. 22.4% were conventional financing, 39.5% were FHA, and 17.1% were VA. Yes, you math geeks, I know that adds up to 100.1%. It's a rounding thing.
The median days on market for sold units remained unchanged from 1Q at 29, and the median escrow period was nearly unchanged at 42 days. This isn't news to anybody working in this market. Truth be told, that 29 DOM number is actually a little surprising. Anymore it seems that when a property is still on the market after two weeks, we figure that something is amiss. Even short sales are getting sold quickly with multiple offers these days. Crazy stuff.
Are we finally at the bottom? Maybe. My best guess is that barring further catastrophic meltdown in our economy, we're probably as low as we're going to be, give or take a couple of percent. But the thing is, I expect us to be at the bottom for a long time, probably a year or more, before we start to see prices appreciate again. We're probably heading into an inflationary period and somewhat higher interest rates, and that's going to affect affordability. We're also going to continue to see distressed sales dominate our market for the foreseeable future. I think those factors will dampen recovery. I don't expect a return to peak prices anytime soon, maybe not for years.
First big news item: After a very robust first quarter in terms of sales volume, we saw a steep decline in the number of units sold compared to the same quarter in 2008. We had 76 total sold units for the quarter, which was down 27.6% from the 105 units that we had in 2Q 2008. I've been touch on this in my Monday Morning Numbers posts for a little while. I think that this is in great part due to a lower inventory level. I can't track a number for it, but from observation and talking to the other agents in town, I can tell you that buyer activity hasn't slowed down. Heck, I'd bet that there were more offers written in this quarter than have been written in any quarter in recent years. It's just that so many properties get tons of offers. I think that the slowdown in the number of sold units owes more to thin inventory than anything.
Second big news item: Click here for an updated price per square foot chart. After 6 consecutive quarters of what can only be described as freefall, our prices are virtually unchanged for the second quarter in a row. This is huge, in my opinion. We had a couple of relatively flat quarters back in 2007, but things were a little different then, and the buyer activity wasn't nearly as strong as it is now.
A few disjointed observations on the second quarter:
REO's comprised 55.3% of the sold units. This is down from 67.1% in the first quarter, and is probably a result of fewer foreclosures coming on the market. We're going to start seeing a few more REO listings coming on the market, so I expect that number to return to the 65% range in the coming months.
Short sales continue to take a bigger percentage of the market, with 17.1% of the quarter's sales. This is up from 14.6% in the first quarter, and is the highest it's been in this cycle.
The "Wow!" of the quarter for my money: 21.1% of our sales in the quarter were cash deals. 22.4% were conventional financing, 39.5% were FHA, and 17.1% were VA. Yes, you math geeks, I know that adds up to 100.1%. It's a rounding thing.
The median days on market for sold units remained unchanged from 1Q at 29, and the median escrow period was nearly unchanged at 42 days. This isn't news to anybody working in this market. Truth be told, that 29 DOM number is actually a little surprising. Anymore it seems that when a property is still on the market after two weeks, we figure that something is amiss. Even short sales are getting sold quickly with multiple offers these days. Crazy stuff.
Are we finally at the bottom? Maybe. My best guess is that barring further catastrophic meltdown in our economy, we're probably as low as we're going to be, give or take a couple of percent. But the thing is, I expect us to be at the bottom for a long time, probably a year or more, before we start to see prices appreciate again. We're probably heading into an inflationary period and somewhat higher interest rates, and that's going to affect affordability. We're also going to continue to see distressed sales dominate our market for the foreseeable future. I think those factors will dampen recovery. I don't expect a return to peak prices anytime soon, maybe not for years.
Monday, July 13, 2009
Monday Morning Numbers 7/13/09
Good morning, and welcome to another magnificent summer day here in Lompoc! There are two times a year when this old Midwestern transplant really appreciates living here, and this is one of them. Let's take a look at our market stats for this week:
Active Listings: 92
Contingent Listings: 44
Pending Listings: 58 (28.0% of the inventory)
Price changes for the past week: 9 (5.2%)
New listings: 14
Click here for the up to date price per square foot chart.
We have 5.4 months of inventory on the market this morning. It looks like our inventory is starting to trend back up over the past few weeks. The 14 new listings that came on last week were the most we've seen in a couple of months. Half of those were REO properties. I think we're going to be seeing a few weeks like this in the next couple of months because of the increase we saw in properties going back to the banks over the past couple of months.
Come back later this week for a review of our second quarter activity, and an updated price per square foot chart.
Active Listings: 92
Contingent Listings: 44
Pending Listings: 58 (28.0% of the inventory)
Price changes for the past week: 9 (5.2%)
New listings: 14
Click here for the up to date price per square foot chart.
We have 5.4 months of inventory on the market this morning. It looks like our inventory is starting to trend back up over the past few weeks. The 14 new listings that came on last week were the most we've seen in a couple of months. Half of those were REO properties. I think we're going to be seeing a few weeks like this in the next couple of months because of the increase we saw in properties going back to the banks over the past couple of months.
Come back later this week for a review of our second quarter activity, and an updated price per square foot chart.
Friday, July 10, 2009
Focus On Newer Construction
This week I'm updating the activity on newer construction in our market. I first reported on these back in March (click here). As a quick refresher, what I mean by "newer construction" is a house built in 2000 or later, not counting homes offered or sold by the builder. Let's see what's new since I covered this a few months ago.
Our overall inventory has been declining pretty significantly for most of the year. The newer home segment of the market has actually bucked that trend. We have 17 of them on the market today, vs. 14 in March. Of these 17 homes, 3 of them are REO listings, and 9 are short sales. I'm actually a little surprised to see as many as 5 traditional sellers in this segment, because so many of these homes were sold at or around the peak of the market. Of the 9 short sales, 5 are contingent, so they're actually in contract. I didn't have notes indicating any contingent short sales in this segment back in March, so that probably accounts for the increase in inventory.
We have zero, zip, nada in terms of pending units in this segment right now. I would expect that a couple of those contingent listings should be in pending status soon. We've had 7 sales of these homes since the March post. 5 of those were REO's, one was a short sale, and one was a traditional seller. Not surprising numbers here. As I mentioned a few months ago, a lot of these were sold back in the days when prices were higher and lending guidelines were much looser, so I expect that short sales and REO's are going to remain with us for a while, maybe a bit longer than the market as a whole. The upside is, however, that these are still holding value this year despite the disproportionate number of distressed sales. I still think that when we start to see prices recover, that we'll see these properties appreciate better than the market as a whole.
Most of the second quarter sales should be reported by next week, so I'll do a second quarter report next week and update the price per square foot chart.
Our overall inventory has been declining pretty significantly for most of the year. The newer home segment of the market has actually bucked that trend. We have 17 of them on the market today, vs. 14 in March. Of these 17 homes, 3 of them are REO listings, and 9 are short sales. I'm actually a little surprised to see as many as 5 traditional sellers in this segment, because so many of these homes were sold at or around the peak of the market. Of the 9 short sales, 5 are contingent, so they're actually in contract. I didn't have notes indicating any contingent short sales in this segment back in March, so that probably accounts for the increase in inventory.
We have zero, zip, nada in terms of pending units in this segment right now. I would expect that a couple of those contingent listings should be in pending status soon. We've had 7 sales of these homes since the March post. 5 of those were REO's, one was a short sale, and one was a traditional seller. Not surprising numbers here. As I mentioned a few months ago, a lot of these were sold back in the days when prices were higher and lending guidelines were much looser, so I expect that short sales and REO's are going to remain with us for a while, maybe a bit longer than the market as a whole. The upside is, however, that these are still holding value this year despite the disproportionate number of distressed sales. I still think that when we start to see prices recover, that we'll see these properties appreciate better than the market as a whole.
Most of the second quarter sales should be reported by next week, so I'll do a second quarter report next week and update the price per square foot chart.
Monday, July 6, 2009
Monday Morning Numbers 7/6/09
Hope everybody had a great 4th of July weekend. We had a good time, took a couple of days off, and now we're back at it. Let's take a quick look at this week's market stats:
Active Listings: 87
Contingent Listings: 40
Pending Listings: 58 (31.4% of the inventory)
Price changes for the past week: 9 (7.1%)
New listings: 6
Click here for the up to date price per square foot chart.
Not a lot of noteworthy change in the market since last week. The numbers are pretty flat except for new listings, which is about half of what we've been running over the past few weeks. That might be due in part to the holiday. We have 5.4 months of inventory on the market this morning.
Later this week I'll probably update the activity on newer homes, unless something more interesting comes to mind.
Active Listings: 87
Contingent Listings: 40
Pending Listings: 58 (31.4% of the inventory)
Price changes for the past week: 9 (7.1%)
New listings: 6
Click here for the up to date price per square foot chart.
Not a lot of noteworthy change in the market since last week. The numbers are pretty flat except for new listings, which is about half of what we've been running over the past few weeks. That might be due in part to the holiday. We have 5.4 months of inventory on the market this morning.
Later this week I'll probably update the activity on newer homes, unless something more interesting comes to mind.
Thursday, July 2, 2009
Focus On REO Activity
It's been a few months since I covered REO's in on of my "Focus On" posts. I had a post back in March (click here) where pointed out some of the differences in home values between REO & non-REO properties. Most of what I said then still holds true. We're still seeing REO's selling for less than similar properties, for the most part. But there are some interesting things happening with these properties lately.
As has been true for quite a while, REO's are comprising a much smaller percentage of active listings than they are sales. REO's accounted for 42% of new listings that came on the market in the second quarter, pretty close to what we saw in the months preceding. About 57% of sold and 51% of pending units in the second quarter were REO's. Those numbers are down somewhat from a few months ago, but they are still clearly a big market driver.
We've been seeing an increase overall of late in sold units selling for at or above list price (not accounting for seller paid closing costs). This trend has been heavily driven by REO activity. Those of us working this market know from experience that REO's are, for the most part, coming on the market aggressively priced and are getting multiple offers the vast majority of the time. What I hadn't really done until this morning was to actually pull the numbers. Even I'm a little surprised at this: In the first quarter of this year, 43% of our overall sales and 55% of our REO sales sold for at or above list price. In the second quarter, those percentages jumped up a little to 57% overall and 61% for REO's. One of these days, if I get bored, I might go back and track that through 2008 as well, but I'm pretty sure that we'll see a trend here.
Let's look at what we have coming up. I said back in March that I didn't anticipate a "tidal wave" of inventory. I think I projected an increase in inventory to around 130-150 in the summer. I think that's too high now, but I do think that a bit of an increase is coming based on the foreclosure activity we've been seeing.
I've been keeping track of unlisted REO inventory for a few months - properties that have gone back to the bank but have yet to hit the market. We had around 50 of those units back in March, and up until the past few weeks, that number fluctuated around that level. Recently, we've seen a bit of an increase in properties going back to the bank, and as a result, we have about 68 such homes. When you see the foreclosure numbers, you'll understand:
January - 19
February - 15
March - 21
April - 17
May - 32
June - 35
Part of this probably had to do with a hold that Fannie Mae and Freddie Mac put on foreclosures of owner occupied homes earlier this year. That hold expired in April. But it looks like we're seeing a bit of a decrease in the number of unresolved trustee sales, probably because they have started foreclosing some more properties. When I first looked at that number at the end of March, I saw 86 unresolved sale notices. It had climbed as high as 118 in the middle of June, but has dropped off a little to 107 today.
Despite the increase in foreclosures, we're still seeing the vast majority of Trustee's Sales get postponed, and we're starting to see what looks like a little bit of an increase in cancellations of these sales. Diane & I have been tracking these sales and going to the courthouse for some sales periodically over the past few months. One of these days, I'll write about that process - it's pretty crazy, and not for the faint of heart.
A new California requirement went into effect a couple of weeks ago for lenders to either put in place a program to modify loans for some homeowners, or to delay a filing of a Notice of Trustee's Sale for 90 days. This will likely have a mild dampening effect on REO listings coming over the next few months. Right now, I think we're status quo as far as inventory levels are concerned for the immediate future, with maybe a slight trend upward. I wouldn't be surprised to see our inventory level move back to around 100-110 units in the next handful of weeks. Not by any stretch of the imagination is that a big increase, especially in light of our current demand.
As has been true for quite a while, REO's are comprising a much smaller percentage of active listings than they are sales. REO's accounted for 42% of new listings that came on the market in the second quarter, pretty close to what we saw in the months preceding. About 57% of sold and 51% of pending units in the second quarter were REO's. Those numbers are down somewhat from a few months ago, but they are still clearly a big market driver.
We've been seeing an increase overall of late in sold units selling for at or above list price (not accounting for seller paid closing costs). This trend has been heavily driven by REO activity. Those of us working this market know from experience that REO's are, for the most part, coming on the market aggressively priced and are getting multiple offers the vast majority of the time. What I hadn't really done until this morning was to actually pull the numbers. Even I'm a little surprised at this: In the first quarter of this year, 43% of our overall sales and 55% of our REO sales sold for at or above list price. In the second quarter, those percentages jumped up a little to 57% overall and 61% for REO's. One of these days, if I get bored, I might go back and track that through 2008 as well, but I'm pretty sure that we'll see a trend here.
Let's look at what we have coming up. I said back in March that I didn't anticipate a "tidal wave" of inventory. I think I projected an increase in inventory to around 130-150 in the summer. I think that's too high now, but I do think that a bit of an increase is coming based on the foreclosure activity we've been seeing.
I've been keeping track of unlisted REO inventory for a few months - properties that have gone back to the bank but have yet to hit the market. We had around 50 of those units back in March, and up until the past few weeks, that number fluctuated around that level. Recently, we've seen a bit of an increase in properties going back to the bank, and as a result, we have about 68 such homes. When you see the foreclosure numbers, you'll understand:
January - 19
February - 15
March - 21
April - 17
May - 32
June - 35
Part of this probably had to do with a hold that Fannie Mae and Freddie Mac put on foreclosures of owner occupied homes earlier this year. That hold expired in April. But it looks like we're seeing a bit of a decrease in the number of unresolved trustee sales, probably because they have started foreclosing some more properties. When I first looked at that number at the end of March, I saw 86 unresolved sale notices. It had climbed as high as 118 in the middle of June, but has dropped off a little to 107 today.
Despite the increase in foreclosures, we're still seeing the vast majority of Trustee's Sales get postponed, and we're starting to see what looks like a little bit of an increase in cancellations of these sales. Diane & I have been tracking these sales and going to the courthouse for some sales periodically over the past few months. One of these days, I'll write about that process - it's pretty crazy, and not for the faint of heart.
A new California requirement went into effect a couple of weeks ago for lenders to either put in place a program to modify loans for some homeowners, or to delay a filing of a Notice of Trustee's Sale for 90 days. This will likely have a mild dampening effect on REO listings coming over the next few months. Right now, I think we're status quo as far as inventory levels are concerned for the immediate future, with maybe a slight trend upward. I wouldn't be surprised to see our inventory level move back to around 100-110 units in the next handful of weeks. Not by any stretch of the imagination is that a big increase, especially in light of our current demand.
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