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Foreclosures and defaults are down in Marin County

Istvan Fekete — Fri, 22 Jul 2011 15:01:48 +0000

Although 2011 began with a high inventory of foreclosures, Marin County foreclosures slowly declined in the second quarter and mortgage defaults also dropped, according to figures released this week by Bradley Real Estate.
“This may be the point where we look back and say it’s starting to go in another direction,” Robert Bradley, president of Bradley Real Estate from San Rafael said of the mortgage crisis that began in 2006.
During the April to June period Marin County recorded 130 new foreclosures, identical to the number recorded a year prior, DataQuick reported, while notices of default dropped 9.1% year-to-year in the second quarter.
Realtors say that one powerful factor in the foreclosure decline is the high number of short sales. In the first six months of 2011 there were 165 short sales closed in Marin, which is 13.4% rise from the 149 in the same period of 2010, Bay Area Real Estate Service Inc. reported.
Troubled properties still make up a sizeable percentage of Marin County’s housing market. In Q2 21.3% of the properties sold were either bank-owned or short sales, up from 17.3% in the same period of 2010, according to the multiple listing service.
“A condo that was selling for $250,000 six months ago in Central Marin might now sell for $200,000 because there is a glut on the market, and that glut is distressed sales, either bank-owned or short sales,” said George DeSalvo, a broker with Frank Howard Allen Realtors and a foreclosure specialist.

Bay Area home sales are on the rise

Istvan Fekete — Mon, 18 Jul 2011 15:00:33 +0000

June brought a minor boost for California’s housing market, but activity was still slower that a year prior, according to DataQuick.
A total of 38,975 homes were sold in the state last month, which means 9.7% rise from 35,536 recorded in May.
The nine-county Bay Area homebuyers purchased 7,998 new and resale condos in June, up 15% from prior month, but still down 5% from June of 2010. The median price stayed at $377,750, which is slightly higher than May, but down 10% from a year ago.
“June likely benefited from a combination of factors, such as price reductions, low mortgage rates and perhaps a batch of short sale transactions from spring that took months to close,” DataQuick president John Walsh said.
But Walsh cautioned “last month was not a particularly strong June, historically speaking, and one month’s increase in sales from the prior month doesn’t constitute a trend.”
Indeed, last month’s sales were 11.3 percent lower than the 43,964 posted in June 2010.
According the DataQuick’s report the median price for a home in the region dropped more than 6% to $253,000 from a year ago.
Distressed properties accounted more than 50% of all homes sold last month, maintaing the pressure on existing, non-distressed home prices.
Foreclosures accounted 35% of June’s sales, a 0.3% decline from May, but a up from 34.1% a year earlier.
Short-sales accounted for 17.6 percent of existing home sales. That was identical to May’s portion but down from 20 percent a year earlier.

Former Hercules city manager’s house on market in short sale

Istvan Fekete — Mon, 11 Apr 2011 15:00:00 +0000

Sakamoto, former city manager of Hercules, said he brakes his relationship with the city and he is moving closer to his wife’s new workplace. As his home is worth no more the price he paid when it purchased, he sees short sale as the only alternative.
Sakamoto’s two story property near Sycamore Avenue lays on 1,532 square-foot, has three bedrooms, two-and-a-half baths, a detached garage, a pantry and a series of upscale amenities, the MLS records show. The backyard includes a putting green.
Sakamoto bought the house back in May 2003 for $464,500, Contra Costa County records show. Over the next few years, home prices were up substantially, until the housing collapse in 2007 and 2008. Sakamot several years ago repaid the city in full for a $100,000 housing allowance it granted him in 2002.
Sakamoto was Hercules’ city manager from 2002 to 2007, when he retired, citing a chronic back problem.

Bay Area Realtors say 2011 is going to be year of Short Sales

Amitesh Kumar — Sun, 14 Nov 2010 15:00:00 +0000

Santa Clara County of the SF Bay Area is one example we can look into for the current activity level in the housing markets in and around San Francisco. California is retaining its fourth place consistently for the last several months in the top 10 list of states, heavily hit by the foreclosure crisis. But it is really turning the corner towards rebound from the downturn, for the simple fact that conditions are brighter than 2009 and not worsening towards double-dip.

The economy in general across the country is showing a slow but steady growth, as per economists. This is reflecting in most of the housing markets, including Santa Clara County, where things are happening as per earlier predictions. For example inventory of homes for sale is picking up and demand from buyers for own occupation is going down – a typical trend for this time of the year – summer taking leave and giving way to the fall. But the pace is somewhat faster than expected by market watchers.

Particularly in Santa Clara County – repossessed properties by lending banks after foreclosure public auction are drying up fast – as lenders going slow on foreclosure process, giving long rope for modifications and short sale escape routes, rather than accumulate dead-weight properties. Local realtors report that as against the normal practice of holding 40 to 50 listings of repo-properties at a time, they now have just 1 or 2. Some of them that had only a few are out of business.

Many home owners in the area are not making it to the bank for foreclosure process and based on this indication 2011 will be the year of the short sale – lending banks getting their money back, an amount lesser than the mortgage balance though, but certainly money instead of premises; and home owners getting freed from the mortgage debt once and for all.

For the time being, the following statistics are turning up from Santa Clara County: Available homes for sale – 3,332; out of this 67.8% of properties are for normal sales; 74.5% represent bank-repossessed; and 23.4% are available for short sales. Sold versus list price in August 2010 – 99.73% against 98.5% in August 2009 and increase by 1.23%; Median home price for single-family homes – August 2010:$629,500 against $560,000 in August 2009; an increase of 12.4%.

Lenders act smart in trickling foreclosures for sale in Bay area markets

Amitesh Kumar — Mon, 27 Sep 2010 18:00:21 +0000

Housing markets in the 9-County SF Bay area are no exception to the prevailing gloom in real estate across the country. Foreclosure properties were flooding the markets as elsewhere for the last few years. Inventory of unsold homes was mounting, as reported month after month, until, of course reaching the peak towards the end of 2008.

The year 2009 passed by with a kind of stagnation and the federal as well as state governments intervened with foreclosure mitigation plans (also criticized as bail-out programs) to help the distressed home owners retain their homes, with loan modifications; short sales; tax-break incentives for home buyers etc. which to a certain extent contained the crisis, though not addressed the problem fully.

Since the start of this year, particularly in the first quarter ended April, we were hearing good news of spurt in home sales, increase in median home prices and return of customer confidence etc. The tax-credit incentive acted as a morale-booster in increased sales of homes – both under distress sale and traditional sale – as reported by every market including SF Bay Area.

After the expiration of the tax-break benefits by 30^th April, as expected there was decline in home sales in the months of the latest quarter ended July. But what is intriguing market watchers is the report for August. The number of foreclosed properties sale is sagging, despite the fact that mortgage interest rates bottomed out a record low points in the last 50 years.

For example in Santa Clara and San Mateo counties, while the number of properties stuck in the foreclosure process is really high, those reaching the market for distress sale is only a portion of them. See the figures – in Santa Clara County 4,045 homes and in San Mateo County 1,429 homes have been scheduled for foreclosure sale, but not yet auctioned off.

In the pre-foreclosure stage there were 3,947 homes in Santa Clara County and in San Mateo County the number is 926 homes – which received default notices, but surprisingly not scheduled for foreclosure sale.

Real Estate experts see the reason behind as lenders are acting smart – giving more time for delinquent borrowers; work out loan modifications; encourage short sales and thereby stall these properties reaching the market, to avoid total fall in the prevailing prices.

Short sales represent a quarter of all listing inventory

Istvan Fekete — Mon, 16 Aug 2010 18:00:53 +0000

Short sales increase made this type of real estate transaction common, so this is part of the options list for a homebuyer. In fact, a report published by RealtyTrac revealed that short sales now represent almost one third of all residential sales in the country. In Tampa Bay, those numbers are likely to be higher, said Cathleen F. Smith, the regional senior vice president of Coldwell Banker Residential Real Estate.

"So far in 2010, short sales represent 25.7% of all active listing inventory, 59.2% of all sales pending and 21.5% of all closed deals in the Tampa Bay area" said Smith.

Analyzing these numbers a Coldwell Banker’s affilitate, Sunbelt Title Agency launched a new service, called Short Trac – for those who try to sell their homes through short sale.

"Basically it’s a program that makes it easier for sellers to navigate through what has proven to be a very simple consuming, and unfortunately frustrating process. We believe Short Trac streamlines the process and will lead to more lender approvals in less time," Smith added. "This benefits everyone involved, especially the seller who may be faced with the reality that this is the only way they can sell their home and potentially avoid foreclosure."

Although the housing market yet far from recovering, and the numbers of unemployment would lead us to think there is no need for luxury home sales, the number show that sales of $1 million-plus properties are on the rise. According to Smith, condo sales in this segment is up with 220% compared to last year.

San Francisco distressed sales on the rise

Istvan Fekete — Fri, 13 Aug 2010 17:00:10 +0000

According to Morgan Stanley New York home prices rise and San Francisco values declined in May. The numbers show a 1.2 decline for San Francisco prices, while New York gained 0.8 percent in May, said Morgan Stanley in a report regarding homes that weren’t in foreclosure or involved in a short sale.

However, short sales are on the rise, there is a 30% increase nationwide over the past year, which destabilizes the housing price indexes, explained Oliver Chang, a U.S. housing strategist, co-writer of the Morgan Stanley report. Short sales proceeds are needed up to 40% more than foreclosed home proceeds, driving up S&P/Case-Schiller indexes even when values of non distressed homes are falling.

"There is a price premium you can get from a short sale," said Chang. "That makes it look prices are going up when they’re not."

Although the S&P/Case-Schiller index shows a rise in San Francisco home prices in May from April, there is an increase of short sales among distressed sales and a decrease in the number of distressed sales, according to Morgan Stanley. San Francisco prices have gained 21% since reaching a low in March pas year as the Case-Schiller index shows.

Washington, Dallas, Chicago and Los Angeles are other cities where property indexes increased which resulted in declined values of non-distressed homes.

Month of May sees fewer Default Notices in Bay Area – effect of Short Sales?

Amitesh Kumar — Fri, 18 Jun 2010 20:00:30 +0000

As we know, Default Notices are the first bell of alarm sounded by the lenders to their borrowers, staying behind mortgage repayments. The foreclosure laws of all States stipulate that a legal notice, appropriately worded and giving full details is to be first sent to the home loan borrower in case the monthly repayment commitment is not met – consecutively for at least 3 months. This is to give an opportunity to the other side, to make good the lapsed installments and bring the mortgage to current.

The issuance of a Default Notice commences the foreclosure process. In the present foreclosure scenario, the numbers of Default Notices issued are taken as the barometer, to assess the foreclosure activity in a certain region – by its increase or decrease. Eventually it gives a wider meaning for industry analysts to interpret into more analytical predictions.

This way, the statistics released by Realtytrac for the month of May reveals that the number of Default Notices fell by about half in the East Bay, during May 2010, from a year ago, since more distressed homeowners opted for Short Sales.

Industry observers are of the view that the slowdown in Default Notices that began this year are tied to home loan borrowers facing foreclosure process, getting into trial loan modification programs.

According to Daren Blomquist, marketing and communications manager of Realtytrac, which released its latest foreclosure activity report, while defaults are down, the number of previously foreclosed homes being taken by banks is on the rise; lenders continue to work through a backlog of delayed home repossessions, including many that failed to get permanent loan modifications.

Blomquist commented that it is a tale of two different trends with the foreclosure process; it’s kind of good news and bad news.

The concept of Short Sale is selling a distressed home for a price less than the mortgage amount, which requires the approval and consent of the lender. The fact that the number of Default Notices are declining is an indication that more number of troubled home owners are opting for Short Sale route and thereby escape from the foreclosure process.

Will the SF Bay Area see many foreclosure bargains?

Amitesh Kumar — Fri, 11 Jun 2010 20:00:42 +0000

The recent survey conducted by Trulia.com and Realtytrac among home buyers and renters to assess the sentiments in their minds, about home buying from the foreclosure pool, revealed that with the changed timings, there is slightly less enthusiasm – coming down from 55 percent in 2009 to 45 percent currently.

Despite this, the selling and buying of bank-owned properties are continuing steadily upwards in all parts of US, according to Rick Sharga, senior vice president for Realtytrac. The official went on to say that the actual sales of bank-owned properties (otherwise known as REOs), along with sales of properties in the foreclosure process, continue to increase. According to their data, these sales are accounting for more than 30 percent of total sales in the first quarter of 2010.

Realtytrac experts anticipate that there will be an increased number of both REO purchases and short sales throughout the rest of the year, as the most active buying segments – first time home buyers and investors – continue to look for bargains.

Taking the question whether the Bay Area, particularly San Francisco would see many such bargains, the experts are more tilted towards the positive and affirmative side. The reason they attribute is for many would-be buyers, they can fulfill their dream of owning a house in San Francisco, only through the reduced prices currently offered by Bank-owned and repossessed properties.

Of all the foreclosure home buying, Bank repo homes are better placed – no second or third liens attached, since all of them get cleared once the property is repossessed; generally well-maintained in a “marketable condition”; ready to occupy with the existing residents vacated; and there are lots and lots of such properties made available throughout the country, including the Bay Area.

Another well-founded reason for this projection is although places like San Francisco have stayed strong through the slump, experienced in all other metros, home buyers may see more foreclosure properties made available, when Option ARM loans reset. Bubble Meter Blog predicts that these resets will “begin to become a problem in about the mid-point of this year and really shoot up around mid-2011”.

Property Tax break applications mount in San Francisco

Amitesh Kumar — Mon, 07 Jun 2010 20:00:09 +0000

Requesting for a break in Property Tax payment is another way of delaying the inevitable, resorted to by the troubled home owners in the foreclosure environment. Property Tax is levied on the assessed value of the concerned property. Arising out of the down-turn economy and consequent housing bubble, home owners in San Francisco and elsewhere in the country, find that the market value of their homes has gone below the assessed value.

So the home owners are allowed an option to request for re-assessment of their home values and until such time can request for break in Property Tax payment. This is what happening at San Francisco in a never-before measure presently. On a revised assessment, if the property value is found lesser than the current market value, home owners can get a temporary reduction in Property Tax.

According to the city Assessor-Recorder Phil Ting, as many as 6,462 owners of residential properties in San Francisco have applied for temporary tax breaks in the current year.

Just like foreclosure, short sale, walking away from own home etc., this is a new phenomenon for US home owners. The upsurge in tax break applications in the recent past is proof enough for this. The number of requests for informal review and tax break received in 2009 were 4,421 and in 2008 there were only 1,673 applications. Three years back, when the foreclosure fever and reduction in home values did not catch up with the same vigor, a mere 248 applications for Property Tax reviews were received.

As it is, totally 11,700 home owners were granted temporary property tax reductions in the current fiscal year ending 30^th June. The revisions have been made at the request of the property owners and also at the initiation of the assessor’s office. In all, the reduced value as assessed so far added up to $1.4 billion.

While the home owners are benefited, the reduction in Property Tax revenue hits hard on the welfare measures of the city and municipal authorities, in carrying out services like – police patrol; health clinics; parks upkeep; street repair and so on.

Phil Ting says “The ongoing trend of increased informal reviews represents the downturn in the real estate market.”