Report: Entry-level home buyers make up biggest share of market ever

First-time buyers made up a bigger share of the housing market in 2009 than any other year on record, according to a study released this afternoon.

The number of first-time home buyers rose to 47% of all home sales from 41% of transactions in last year’s study, and was the highest on record dating back to 1981, according to the Washington-based National Assn. of Realtors.

Home sales have been fueled in recent months by cheap foreclosure properties. Both investors and first-time buyers have jumped into the market to snap up these heavily discounted digs.

For first-time buyers, one major incentive fueling the spree has been a tax credit extended last week by the Obama administration and expanded to include move-up buyers. The Realtors group lobbied heavily for the legislation. Paul Bishop, vice president of research for the Realtors group, said in a statement that several factors have been at play, including the tax incentives.

Many independent economists, however, contend that the credits are being given to people who would have bought anyway.

Of those first-time buyers, 55% purchased their home with a loan backed by the Federal Housing Administration.

That news comes on a day on which an independent audit of the FHA’s finances shows that its cash reserves have shrunk to a level below its legal limit, meaning that this pillar of the recent housing market upswing might need a taxpayer-funded bailout.

From the Washington Post:

The audit examined the excess cash the agency must set aside to deal with unexpected losses in its flagship home-buying program, which has played a key role in supporting the housing market.

As of Sept. 30, those reserves had an estimated value of $3.6 billion, a sharp drop from the $12.9 billion available a year earlier, the audit found. The current total represents 0.53 percent of all outstanding single-family-home loans insured by the FHA, well below the 2 percent portion set by law. This is the first time reserves have fallen under that threshold since 1994.

-- Alejandro Lazo

This weekend: A flurry of condo and townhome auctions

Still sorting out your weekend plans? Maybe it’s time to snap up that discounted downtown loft.

Beverly Hills-based auction company Kennedy Wilson is closing out 55 units in the Market Lofts building with a session Saturday. The auction is part of a trend playing out across the region as fancy edifices put up during the boom years are now sitting vacant.

From The Times’ May 18 story on the subject:

Across Southern California, projects conceived during the housing boom, but completed after the bust, are sitting largely vacant. Developers are desperate to unload these units, but they face some particular challenges. Banks often won't provide mortgages to buyers in buildings that are less than 50% occupied, reducing the pool of eligible purchasers. Converting the projects to rentals means even steeper losses because the cash flow often won't cover a developer's construction costs.

The one- and two-bedroom lofts on sale this weekend are on West 9th Street and South Flower Street and are built in typical Brooklyn style with exposed, 9-foot ceilings. The lofts are constructed above a series of retail shops including Coffee Bean & Tea Leaf, Cold Stone Creamery and Quiznos Subs and a Ralphs grocery store.

Other amenities include a furnished lobby with three elevators, a landscaped deck, a swimming pool, a spa, a 20-seat screening room and a fitness center. Starting bids will run from $140,000 to $295,000 for properties previously priced from $438,500 to $888,761.

Check out the full details here. Those who want to register can still do so.

If downtown isn't your style, then 14 luxury townhomes are also on the block this Sunday at Hansen Villas in Pacoima. The auction will be at the Airtel Plaza Hotel in Van Nuys. More information is here.

And speaking of condominiums, the Evo condominium building threw itself a party Thursday night for residents on its sixth-floor pool terrace. The developers were celebrating their 200th condo sold. The 24-story tower is at West 12th Street and Grand Avenue downtown.

-- Alejandro Lazo

Photo: The Market Lofts in downtown L.A. Credit: Kennedy Wilson

Large solar-powered home community opens in Santa Fe Springs

Not far from downtown Los Angeles, Comstock Homes is opening what it claims to be the largest solar-powered home community from a single builder.

The Villages at Heritage Springs will take up 54 acres in Santa Fe Springs, and will include 384 residences once it is complete. For now, 18 single-family homes and 19 townhouses are for sale.

Comstock Homes, the residential division of commercial real estate developer Comstock, Crosser & Associates, builds only in California.

The solar roof tiles on the Santa Fe homes, provided by San Jose-based SunPower Corp., could help lower homeowners’ power bills by up to 60%. The properties also feature dual pane windows, high-efficiency heating and air conditioning, tankless water heaters and energy-efficient lighting.

Townhomes in the gated community range in size from 1,390 to 1,910 square feet and cost between $385,000 and $457,000. Single-family homes are 1,763 to 2,166 square feet and priced from $485,000 to $576,000.

-- Tiffany Hsu

Photo: Edelman for the New Solar Homes Partnership

Malibu picks sewers over smell

 

The Malibu septic-tank-versus-sewers issue has finally been settled after years of debate, according to "Septic tanks on their way out in Malibu" at latimes.com. The timeline:

New septic systems will not be permitted in Malibu, and owners of existing systems will have to halt wastewater discharges within a decade.

What it'll cost homeowners:

Residents in affected areas would be required to pay about $500 a month to cover the cost of hooking into a central sewage system, according to the city's projections. And businesses would face payments of up to $20,000 a month.

Wow. $500 a month? Some historical perspective:

In many ways, the septic tanks played a large role in Malibu becoming a city. It incorporated and formed its own government in 1991 to stave off Los Angeles County's efforts to install a sewer system in the area. Residents at the time feared sewers would unleash a wave of development that would turn Malibu into Miami Beach West.

In Malibu, septic tanks, leach pits and the ubiquitous stench known as the "Malibu smell" are familiar topics. After rainstorms, officials often post signs on Surfrider Beach urging swimmers and surfers to steer clear because of health dangers. Surfrider often gets failing grades on Heal the Bay's annual water-quality report cards.

Just in case you thought it was all a day at the beach in Malibu.

-- Lauren Beale

Thoughts? Comments?

Photo: Surfrider Beach in Malibu. Credit: Al Seib / Los Angeles Times

 

Prefab housing goes green in Newport Beach

Here's something a little different on the home-building front: We took photos of a prefab home being put together this morning in Newport Beach.

We're not talking double-wide prefab, but rather a sustainably designed modular home by LivingHomes, a developer based in Santa Monica. The house is "poised to become Orange County's first LEED Platinum Certified Home, the nationally accepted third-party benchmark for the highest-performing green buildings," LivingHomes said in its news release.

The two-story residence came in four preconstructed modules, which were hoisted into place by a 250-ton crane. The design, intended for small, urban lots, is being offered for sale nationwide at $275 a square foot installed, not including the foundation or land. The model, called the LHKT 1.5, was designed by Philadelphia architecture firm KieranTimberlake.

The 2,200-square-foot home has two bedrooms, 2.5 bathrooms and a bonus room. The features that the developer has piled on to qualify for the LEED Platinum certification include recycled steel, recycled wood and bamboo siding, recycled glass tiles, photovoltaic panels, high-performance windows with recycled frames and low-flow bathroom fixtures and gray-water plumbing.

After a few hours, the home was 95% complete. The owners are expected to move into the house in about a month, LivingHomes said.

-- Nancy Rivera Brooks 

Photos: It doesn't look like much yet, but the module being hoisted into place will become part of a prefab green home in Newport Beach. Credit: Christine Cotter / Los Angeles Times

Fannie Mae to allow troubled homeowners to rent back homes

Mortgage titan Fannie Mae said it will begin allowing homeowners facing foreclosure to rent back their homes for up to one year in a move aimed at keeping a stack of foreclosures on its books from hitting the market, which is just beginning to show signs of recovery.

The new program is meant for troubled borrowers who don't qualify for or haven't been able to get a loan work-out, such as a modification, according to Fannie's news release.

Under the Deed for Lease program, the borrower would transfer title to the property to the lender by completing a deed in lieu of foreclosure and then rent back the house at market rates -- which in many markets have fallen over the last year and probably would be cheaper than a mortgage payment on a loan made during the boom years.

-- Alejandro Lazo

Photo: Rows of homes in Las Vegas. Credit: Bloomberg

Ryland chief says housing market 'on the mend'

Ryland Group’s chief executive told analysts this morning that he sees the housing market as “on the mend.”

The Calabasas home builder posted a narrower loss Wednesday as the company sold fewer homes amid the construction slump. The loss also came as the government released data showing that new orders for U.S. homes fell unexpectedly last month, raising concerns that consumers will slow their home purchasing as a federal tax credit for first-time buyers approaches its expiration at the end of November.

Nevertheless, CEO Larry T. Nicholson told analysts during a conference call that the housing market appeared to be stabilizing and that was a good sign.

“Well, I think when we say on the mend, we don’t ... mean great leaps forward,” Nicholson said. “I mean we just see inventories continue to decrease. We see price stabilization. We see a lot of things we haven’t seen for a period of time. So I don’t want to sound like we’re overly optimistic. We just see some of the things that have been eroding for a long time have ceased to erode.”

-- Alejandro Lazo

Enterprise promises $4 billion to green low-income housing [Updated]

Enterprise Community Partners Inc. said this morning that it planned to raise $4 billion over the next five years to help “green” low-income homes.

The Maryland-based nonprofit, which focuses on affordable housing and community development, will direct the money toward creating, preserving and retrofitting 75,000 residential, community and commercial buildings across the country and making them energy efficient. The funding commitment is part of Enterprise's ongoing Green Communities initiative.

Enterprise's private investment branch also will make retrofit loans to owners of multi-family buildings for energy- and water-reduction efforts and to make living environments more healthful.

Making buildings greener by addressing sustainability, air quality and the toxicity of building materials has health and economic benefits, executives say. The group called for all new and existing housing to be green by 2020.

The fundraising effort already has been bolstered by several donations, including a $1.5-million grant from the Home Depot Foundation and $1-million grants from the Kresge Foundation and the Kendeda Fund.

[UPDATED at 9:45 a.m.: Along with its funding announcement, Enterprise also released a study about the cost-effectiveness of making affordable housing energy efficient.

"Incremental Cost, Measurable Savings" claims that the average $4,524 per-unit upfront cost of complying with the 2005 version of the Enterprise Green Communities Criteria, a standard of 38 mandatory points and 13 optional ones, is quickly made worthwhile by the $4,851 in utility bill savings.

The criteria include regulations on energy and water conservation and points out how to improve internal air quality by directly venting stoves and bathrooms outdoors. The standard also recommends that homes be built near public transit and away from wetlands while using healthier materials, such as paints and adhesives with low levels of volatile organic compounds (VOCs).

The average cost of incorporating the energy and water criteria was $1,917, but resulted in lifetime utility savings of $4,851, according to the data.

The study looked at 27 housing projects with a total of 1,640 single and multi-family homes. Overall, roughly 16,000 dwellings in 360 housing developments are thought to have complied with the criteria.]

-- Tiffany Hsu

It's 2004 in Manhattan Beach

Median price figures can be skewed by the types of homes that are sold. For example, the median price in a city could go up if a greater share of homes sold were larger, more expensive ones -- even if those same pricey homes sold for much less than they would have at the peak of the market.

For that reason, comparing sale prices of homes to their previous sale price is a more accurate way to capture what's happening in the market. The Manhattan Beach Confidential blog has done just such an analysis. There are enough homes in that city that sold between 2003 and 2006, and were sold again in 2009, that the blog was able to put together a database.

Ten Manhattan Beach houses sold in 2005 were sold again this year. Two broke even, eight others sold for less, often hundreds of thousands of dollars less. The median sale price in MB thorough September this year was $1.46 million, compared with $1.5 million in 2004, the blog says.

Homes sold in 2004 that were sold again this year, however, generally sold for a mark-up. You can read the full report on real estate, with spreadsheets, here.

-- Peter Y. Hong

Signs of life in Southern California's housing market

Southern California’s housing market took another small step toward recovery in September as the median sale price for homes in some areas rose above last year’s levels – the first such increase since the market crashed.

The median price paid for all homes in six Southern California counties in September -- $275,000 -- was unchanged from August and 11% below the same month last year, according to San Diego-based MDA DataQuick.

But in Orange County, the median home sale price last month of $429,000 rose modestly from $425,000 the same month a year earlier -- the first year-over-year gain since 2007, DataQuick said. If condominium sales are excluded, last month’s median home sale price in San Diego and Ventura counties also beat their September 2008 levels.

Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, said several factors converged last month to give home sales a boost. "Tax breaks, low interest rates and pent-up demand added up to create a surge in sales that’s surely gone some way in stabilizing prices,” he said.

But Thornberg cautioned that prices could fall again.

“The question continues to be, how is this going to stand up when the next wave of foreclosures hits the market?” he said.

Even if the housing market takes another hit in the coming months, Thornberg said, the bulk of the market correction is past.

“If prices do fall again, it’ll be another 10% to 15% max,” he said.

The Southern California median price remains at 2002 levels, even without considering inflation, and is 46% below its peak level of $505,000 set in several months of 2007.

Those relatively low prices pushed the number of homes sold in September up 5% over the same month last year, and 0.2% above August. Home sales in the past year picked up first in the lowest-priced inland areas, where massive foreclosures pulled prices down.

Last month’s sales, with a rising median price over last year in some areas, show the mix of homes sold is normalizing. Sales of homes priced at or above $500,000 were 21% of the total, up from 13% in January, DataQuick said.

-- Peter Y. Hong