Focus On North Lompoc

This week we're back to a neighborhood focus, with a look at what's been happening on the north side of town. For an explanation of the geography of the area and types of homes we are covering here, take a look at my first post on the area from last year.

We're fairly light on inventory in the area at the moment, with 10 active listings (1 REO/6 short sales/3 traditional). That's down a bit from the last time I reported on the area back in May despite a trend to higher inventory levels in our overall market. We also have 7 contingent sales in the area (2 REO/8 SS).

Sales activity has slowed slightly since the last update, but it's still pretty good. We have 9 pending units in the area this afternoon (3 REO/2 SS/4 trad), and we've had 13 sales in the past three months (5 REO/2 SS/6 trad). The activity that we're seeing here seems to be pointing towards a lower level of distressed sales.

This is probably one of the hardest areas to really get your arms around in terms of price trends. Because we have a pretty broad range of ages and sizes of homes, we usually don't have enough of any one type of home to really peg a trend. The fact that we have a lower level of distressed sales in the area is probably helping values in the area, but there just aren't enough sales to say for sure.

Next week I'll have my regular Monday Morning Numbers post, but I probably won't have a mid-week update on anything. I'm off to Anaheim for the C.A.R. fall meetings for most of the week. Big fun.

Monday Morning Numbers 9/27/10

Finally, we're getting some summer! We just had to wait until the calendar told us that autumn had officially started. Go figure. Let's take a look at this week's market stats:

Active Listings: 121

Contingent Listings: 36

Pending Listings: 54 (25.6% of the inventory)

New listings: 8

Months of inventory: 5.5
Click here for the updated price per square foot chart.

No significant changes to the numbers this week. We seem to have settled in to a slower period for new listings. Maybe the traditional seasonal patterns that we used to see are beginning to come back. It used to be that we'd see a lot of activity in the summer, and things would slow down after the school year started. In the past couple of years, that trend has fallen by the wayside with the influence of REO listings. We're still probably a long way from "normal" (whatever that is).

Later this week I'll take a look at activity in the north end of town. And tonight at 5:30, I go offline because the Bears are playing the Packers. You can call me if you like - you'll get my voice mail. Bear down, baby.

Focus on REO Activity

As advertised earlier in the week it's time to update you on REO activity in our market. It's been an interesting few months to watch what's happening out there on the foreclosure front, and we are definitely seeing a change in some of our numbers.

REO listings currently account for 20% of our active inventory. That's pretty close to the same number that it's been when I've looked at that stat for the past couple of years. What's been changing is the percentage of pending and sold units. Currently 35.2% of our pending units are REO's, and 35.6% of the sales over the past three months are REO listings. That pending number seems to move a lot one way or the other - when I last covered REO's in June, we were as low as 23%. But there were points in 2009 when it was in the 70% range.

REO listings have dropped pretty dramatically in recent months. The drop from the first quarter to the second was about as large and abrupt a drop as I've seen in any meaningful statistic, from 60.4% ( a level that had been pretty consistent for several quarters) down to 34.8%. What happened?

Well, foreclosure activity dropped a bit a while back and has kind of bounced along a slightly lower level than last year, as you'll see from this chart. We have a couple of spikes here and there, but for the most part we haven't seen as many properties taken back by the banks in foreclosure as we saw last year. We've been bouncing around 60 or so REO properties that have gone back to the banks but haven't yet listed, and that has been a very stable number since I started tracking it early last year.

When I look at the percentages of new listings that were REO properties over the past couple of years, it definitely appears that we have a downward trend there as well. For most of last year, the percentage of new listings each month that were bank owned were in the 40-50% range. Over the past few months, that's dropped into the 20-30% range, with a small spike last month of 36.2%. That goes a long way to explaining why REO sales have dropped off - there just aren't as many of them to sell.

Is this a trend? It sure looks that way. We might see a little bit of an uptick in foreclosure activity in the coming months with Fannie Mae putting more pressure on loan servicers to act on borrowers in default. But that's probably not going to be enough to drive a big spike in activity. If the current trends hold as I expect, we're going to see a slowly diminishing presence of REO properties in our market, and short sales are going to become much more common.

Monday Morning Numbers 9/20/10

Good morning again, and BEAR DOWN CHICAGO BEARS! Sorry about that, I'm just a little over-exuberant about that tough road win. And now it's officially Packer Week... Let's take a look at this week's market stats:

Active Listings: 124

Contingent Listings: 38

Pending Listings: 54 (25.0% of the inventory)

New listings: 6

Months of inventory: 5.9
Click here for the updated price per square foot chart.

We had a bit of a decline in the raw number of active listings this week, mostly due to a notable spike in pending sales. Another tepid week for new listings coming on the market was also a factor. Our months of inventory edged up a little more this week, but that has more to do with a slowdown in sales activity than anything. If that little spike in pending sales turns into anything resembling a trend, we'll probably start to see that months of inventory number edge back down in a couple of months. That might also happen if we continue to see a trend of lower numbers of new listings.

Later this week I'm going to update REO activity in our market. You know you don't want to miss that.

Focus On Central Lompoc

We're back to covering an area this week, moving up the map to the central part of Lompoc. For some background on the area and a description of the properties here, you can check out my first post on the area from last year.

Despite the trend to a somewhat higher level of inventory market-wide in recent months, it appears that we are in a little bit of a decreased inventory level here since the last time I reported on the area back in May. We have 18 active listings on the market this afternoon (5 REO/7 Short Sale/6 traditional).

Sales activity has been fairly solid with 8 contingent sales (2 REO/6 SS) and 14 pending sales (8 REO/2 SS/4 Trad). We've had 29 sold units in the past three months (12 REO/4 SS/13 Trad). Looking at all of these numbers, it appears that we're seeing a little bit higher percentage of distressed sales - especially REO's - than the market as a whole.

The good news here is that a higher level of distressed sale activity doesn't appear to be hurting values too badly. This is probably our highest volume area that I cover, so I can put a little more faith in the numbers than for most of our other areas. When I filter out everything here except for the 1960ish tract homes, the prices over the past three months appear to be up a little from the previous three month period. The median has edged up by about 2% and the price per square foot is up about 5%. These are encouraging numbers.

Come back next week for an update on overall REO activity in our market. Always good times.

Is it really as bad as they say?

Just a quick bonus blog post this week (I'm still going to hit central Lompoc activity later in the week).

I've been seeing some news reports recently talking about how horrible the housing market is, and how July was one of the worst months in history for home sales. If I believed half the stuff I saw in the news, I'd probably have slit my wrists a long, long time ago...

Two points to make here: First, the news media is in the business of selling advertising, and bad news draws more viewers than good news. What that says about us as a society isn't exactly encouraging, but that's just how it is. So they tend to spin things negatively. What are you gonna do?

The second point is that real estate is all local. That's one of the driving reasons why I write this blog. Even though the national numbers might very well have been bad for July, on a local level we are right on par with last July. We aren't anywhere near the level we were at in the peak years, but it's not as bad as, say, 2007. And our prices still remain stable. My advice? Don't believe everything you see on TV.

Monday Morning Numbers 9/13/10

Dang, it's good to have football back! Even if the Bears did look just gawd-awful winning a game that they tried really hard to throw away. But I'd rather look bad and win than look good and lose. But you didn't come here for an NFL wrap-up, did you? Let's look at our market numbers this morning:

Active Listings: 132

Contingent Listings: 38

Pending Listings: 42 (19.8% of the inventory)

New listings: 6

Months of inventory: 5.7
Click here for the updated price per square foot chart.

Theses are some pretty similar looking numbers to what we saw last week. The new listings were down a bit, but I think that the holiday week might have had something to do with that. We are coming into a time of the year when we traditionally see activity slow down a bit, but things have been weird enough in this distressed property market that our traditional cycles are pretty much out the window.

Later this week I'll have an update on central Lompoc.

Foreclosure Avoidance Seminar

You may recall that a few weeks ago we had our Foreclosure Avoidance Seminar. It was the first time that we’d done one of these events, and we really didn’t know what to expect in terms of attendance and response from the public. I had this sick fear that we were going to be talking to an empty room for a couple of sessions, but it turns out that we had a very good attendance and response. I thought that I’d use this space to share some of the highlights of some of the information that we covered for those who were unable to attend.

The big key points that we wanted to make to our attendees are a couple that we make to every person who contacts us with mortgage problems: You aren’t alone. And you have options. Unfortunately, far too many people who start down this road never seek assistance – 7 in 10 foreclosures happen without any visible intervention.

If you look at the national trends, the numbers are staggering. According to the Mortgage Bankers Association (MBA), around 1 in 6 mortgages in the U.S. are delinquent, and 4.6% of loans are in some stage of the foreclosure process. The local numbers are pretty grim as well, as you know if you’ve been reading this blog for any period of time. I don’t have the MBA numbers for our area but I can tell you that about 40% of homes in our market have negative equity, and we’ve seen around 950 homes lost to foreclosure since the beginning of 2007. So you see what I mean by “you aren’t alone”.

The consequences of foreclosure can be pretty severe. It’s one of the biggest hits you can take to your credit, and it’s the only one that can affect your ability to borrow even after it has rolled off your report. It can also have a negative impact on your employment, both current and future, and it can cause problems for borrowers that have security clearances. There are also potentially some significant tax issues that could arise, and in some cases the lenders could come after a homeowner after the fact for a deficiency judgment. That’s effectively the difference between the total amount owed on the loan (plus late fees, penalties, and legal expenses) and the amount that the lender is eventually able to net after the foreclosure. Bottom line – you don’t want to go down this road if you have other options.

So let’s look at the “you have options” part. We went over a whole series of options for homeowners in default. There are several ways to avoid foreclosure, and it all depends on the situation. In a nutshell here they are:

• Reinstatement – if you have the means, you can pay the past due amount and get everything back where it was.
  
• Forbearance – set up a payment plan with your lender to pay back the past due amount in addition to your regular monthly mortgage.
  
• Sell the property – If you have equity, you can sell it straight out to a third party, pay off the mortgage and walk away with cash in your pocket.
  
• Rent the property – This doesn’t work out often, but if you can rent the property for the amount of the monthly mortgage, it might be a solution.
  
• Deed-in-lieu – Cut to the chase and get it over with. Make arrangements with the bank to take it back without going through the whole process. Some banks still report this as a foreclosure, however, so the consequences could be about the same.
  

And then we have the two options that we spent the most amount of time covering: Refinance/ loan modification and short sales. We had Patrick Chandler from Bank of America Home Loans to talk about the loan side of it, and he covered some programs that are available to struggling homeowners. He covered the options that are available through some new government programs, and rather than go over them here, I’ll send you straight to the source – www.makinghomeaffordable.gov.

Then I talked about short sales. If you’ve been reading this blog for any amount of time, you know something about short sales. But for the uninitiated, a short sale happens when a seller has to sell a house, but won’t be able to pay off the total debt on the house with the proceeds. It’s a process that can be relatively quick, or long and drawn out. And the key component in it is patience. I pointed out to the attendees that one of the truisms in our profession is that we don’t list houses. We list sellers. And that’s especially true in a short sale. If the homeowner isn’t completely on board and willing to cooperate with the agents and banks throughout the process, we’re likely to have a less than successful outcome.

I also covered the new HAFA short sale program, which is also detailed on the link above. In brief, it’s a new program that came out in April that can help homeowners get through the short sale process in a more streamlined and standardized process. It also has some good incentives for both the homeowner and lenders. The big incentives for the homeowner are a $3000 relocation assistance payment and a release of the debt – the lenders have to agree to waive the right to a deficiency judgment. That last part is HUGE in some cases.

We had some very good Q&A time at the end, and in both sessions, we had questions from several people who had been attempting loan modifications. What we weren’t hearing were a lot of success stories. We weren’t surprised to hear that there is a lot of frustration out there. You need to remember, this is a relatively new endeavor for the lending industry. They simply weren’t geared up for this and they’ve been scrambling to get processes worked out and thousands of new employees hired both for modification and short sale departments, all while taking huge losses. So yes, things have been bumpy.

The best advice we were able to give them is to educate themselves on the programs, and be persistent. What I told them - and what I’m telling you - is that if you are going through either a loan modification or a short sale, you have to be your own best advocate. We rattle cages for our clients as much as we can, but you need to be right there making noise as well. It’s a participation sport.

Monday Morning Numbers 9/6/10

Good morning, happy Labor Day! And another summer goes flying right on by... I'm mostly taking today off, but I'd hate to let a week go by without giving you some numbers. So here they are:

Active Listings: 130

Contingent Listings: 39

Pending Listings: 41 (19.5% of the inventory)

New listings: 12

Months of inventory: 5.4
Click here for the updated price per square foot chart.

Raw inventory edged up a bit more this week, but our pending listings dropped with a handful of sales this past week, keeping the months of inventory down to the same level as last week. This is the lowest percentage of pending listings that we've seen overall since March 2009.

Later this week I'll have a recap of the Foreclosure Avoidance Seminar from a few weeks ago.

Look Ma, I'm on the TV again!

A couple of weeks ago I had a call from Dulcie Sinn asking if I would come to the TAP TV studio to appear on her weekly show, Dr. Sinn's Front Porch Politics. For those of you who don't know who Dulcie is, she's a local businesswoman who is running for city council this year. She has a new blog up at dulciesinn.com. I'm not the most political guy in the world, but you know how hard it is for a Realtor to turn down an opportunity to sit and talk about real estate. I had only met Dulcie briefly before, so it was a good opportunity to sit and chat with her. I like Dulcie, she has a lot of good energy and enthusiasm. I hope that if she's successful in her campaign that she can hang onto that and use it to spark some positive changes at city hall.

We had a good conversation about local real estate, and I don't think that we had time to get to some of the questions that she had. Hey, that'll happen when you get me started. It's on the air starting today, on Comcast Channel 24. Here's the schedule:

Fri: 4:00 PM
Sat: 2:00 PM
Sun: 11:30 AM
Mon: 7:00 PM
Tue: 11:00 AM

Check it out if you can. I'm not a Comcast subscriber, so I may not get a chance to see it. Check in with me if you get a chance to see it and let me know how you thought it went.

Focus On The Southside

This week we're back around to the Southside in our neighborhood/area updates. For an overview of the neighborhood and the types of properties we are covering, check out my first post on it from way back last year. After last week's short sale post, I think we could all use something a little more upbeat, and there's some good news to share from this part of town.

And the good news is primarily that distressed property sales appear to be declining here in a big way. We have 16 active listings this afternoon, and only 6 are distressed sales (2 REO and 4 short sales). There are only two contingent sales at the moment (1 REO/1 SS).

The decline in distressed listings also carries over to sales activity. We have 7 pending sales in the area today (2 REO/2 SS), and we've had 12 sold units in the past three months (2 REO/2 SS). I've been talking a lot in recent months about how many traditional sellers we've had coming back into the market, and they are all over the Southside these days.

There's even more good news: It appears that home values are beginning to edge back up here. When I reported on this area back in May, I reported that it looked like we'd been seeing some signs of appreciation here. And when I compare the last three months here to the previously three month period, that trend appears to be holding. We've seen about an 8% increase in median prices and a very slight increase in price per square foot. Again, when we're working with volume as low as this, it's hard to really hang your hat on that data. But it looks promising.

Next week I'm going to do a recap of some of the data from our Foreclosure Avoidance Seminar that we held a couple of weeks ago. It was well received, so we wanted to try to get some of the information out to more people. So come back for that, and please forward a link to anyone who might benefit from it as well.