Real estate roundup: Foreclosures, Realtors and the FHA

There is some more news on the local foreclosure front this morning, with Mathew Padilla at the Orange County Register reporting that outstanding foreclosure auction notices in Orange County rose to a record high of 8,895 at the end of September, “the highest in this housing downturn and probably the highest ever.”

Jim the Realtor at bubbleinfo.com took his own look at the Encinitas and South Carlsbad areas this week, and found 261 single-family homes on the auction and "real estate owned" lists.

Speaking of Realtors getting all tech-savvy on us, the National Assn. of Realtors has announced that it is creating its own online service to compete with services such as Zillow and Redfin.

And on the mortgage front, the Federal Housing Administration has released some new guidelines to make mortgages for condominiums more accessible. In other recent FHA news, the agency last week said it would delay a much-anticipated audit of its finances. For a refresher on some of the FHA’s woes, check out Times staff writer Jim Puzzanghera's story here.

Meanwhile, it appears as if the FHA’s funds are dwindling, as the Washington Post reported this week.

-- Alejandro Lazo

Sale prices of existing homes fall in eight of 10 metro markets in third quarter [Updated]

Prices of existing homes fell in 80% of the nation’s metro markets in the third quarter as distressed sales -- foreclosures and short sales -- accounted for nearly a third of all deals, a national group said this morning.

The national median sale price for an existing single-family home was $177,900, an 11.2% drop from the same period a year earlier, according to the National Assn. of Realtors in Washington. Distressed sales continued to weigh on prices despite a popular tax credit fueling the volume of deals.

Last week President Obama signed an extension of the $8,000 credit for first-time buyers and added a $6,500 extension of the tax break for those homeowners looking to trade up.

During the third quarter, 123 of 153 metropolitan areas reported lower median sale prices for existing single-family homes in comparison with the third quarter of 2008, while 30 areas had price gains.

Lawrence Yun, chief economist of the Realtors group, said shrinking inventories of homes had helped to moderate price declines this year, but many economists worry that another wave of foreclosures could hit the market and again push prices down.

Median prices ranged from $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. No. 2 was San Francisco-Oakland-Fremont at $538,100, followed by the Anaheim-Santa Ana-Irvine area at $498,800.

[Update] The median home price in the Los Angeles-Long Beach-Santa Ana metro area fell 11.5% to $345,600 in the third quarter.

And in case you were interested in sales volume, the Realtors group also reported today that total existing-home sales, including single-family and condo, increased 11.4% in the third quarter to a seasonally adjusted annual rate of 5.3 million units from 4.76 million units in the second quarter, and are now 5.9% above the 5.01 million-unit pace in the third quarter of 2008.

-- Alejandro Lazo

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

Realtors group says pending home sales climb

Pending home sales rose for the eighth month in a row in September, marking the longest upward streak for the number of monthly contracts signed since 2001, the National Assn. of Realtors reported this morning.

The Washington-based association said that its Pending Home Sales Index rose 6.1% to 110.1 from a reading of 103.8 in August, and is 21.2% higher than in September 2008, when it was 90.9. The annual gain was the largest annual increase since the association began measuring the statistic in 2001.

Lawrence Yun, chief economist for the association, attributed the uptick to a surge in home-buying by first-time shoppers looking to take advantage of a federal $8,000 tax credit scheduled to expire Nov. 30.

"What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” Yun said in a statement.

Experts say the tax credit helped stabilize home prices over the summer, though some have voiced concern that both volume and price will fall if Congress allows the credit to expire. The NAR is pushing for an extension, and  could very well get its  wish. Democrats on Capitol Hill may pass legislation extending the credit as early as Tuesday, according to news reports last week.

Critics of the tax credit contend that the subsidy has pushed up home prices artificially and that the housing market will suffer declines much like the auto industry did following the expiration of the popular Cash For Clunkers program.

“It is propping up the market,” said Roberton Williams, a senior fellow at the Tax Policy Center in Washington.

Investment bank Goldman Sachs estimated in a recent report that all of the government’s policies taken to stabilize the housing market  — reducing foreclosures, slowing the pace of distressed sales and stimulating demand through the tax credit  — may have added 5% to home prices nationally.  Once those policies expire, “The risk of renewed home price declines remains significant,” according to the report.

-- Alejandro Lazo

Pending U.S. home sales hit two-year high in July

Home sales nationwide rose this summer to 2007 levels, according to one measurement. From the Associated Press at latimes.com:

Pending U.S. home sales rose more than expected in July to the highest level in more than two years as first-time buyers rushed to take advantage of a tax credit that expires this fall.

The National Assn. of Realtors said today its seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2% to 97.6. It was the sixth straight increase and 12% above the same month last year.

Thomson Reuters economists had expected the index to reach only 96.5.

The Realtors group hasn't seen a six-month rise in its Pending Home Sales index since it started it in 2001, according to a news release at its website.

"The worst is over," said NAR economist Lawrence Yun. "This is not a one-month fluke."

He predicted foreclosures will continue to rise but added that there are now active buyers who are "staying within their budgets." Within two to three years he expects foreclosures to return to their historic levels.

The release quotes NAR President Charles McMillan on the need to keep the momentum going. The group has been lobbying Congress to extend the tax credit into 2010.

But, as some L.A. Land commenters have often expressed on this blog, one has to wonder if the tax credit -- an artificial propping up of the market akin to the "cash for clunkers" program -- isn't just dragging out a return to some semblance of normalcy.

--Lauren Beale

Thoughts? Comments?

Credit: Associated Press

 

 

California backlog of unsold homes drops as July home sales rise, Realtors group reports

California’s backlog of unsold homes declined in July as sales increased, the California Assn. of Realtors said today.

The group's Unsold Inventory Index for existing, single-family detached homes in July stood at 3.9 months, indicating the amount of time needed to unload the supply of homes on the market at the current sales rate, the Realtors group said in its monthly sales and price report. A year earlier the index was 6.9 months.

The median amount of time it took to sell a house was 39.9 days, down from 47.8 days for the same period last year, the report said.

A total of 553,910 existing homes, at a seasonally adjusted annualized rate, closed escrow in July, the report said. Statewide, home resale rates were up 8.1% from June and 12% from a year earlier, it said.

The Realtors group also reported a median sales price in California of $285,480 for existing homes sold last month, up 3.9% from June but down 19.6% from July 2008.

-- Nathan Olivarez-Giles

Many home buyers are unhappy with agents and don't understand loans, CAR says

    The California Assn. of Realtors' annual home buyer survey is out. The group's news release highlights sales to first-time buyers (38% of buyers, double the previous year's rate) and says falling prices and low interest rates boosted sales.

    Deeper into the report (on sale for $29.95), however, are some results showing discontent with agents and apparently high levels of buyers who don't understand their mortgages:

    -- The average buyers' rating of their agents' performance was 3.3 on a 1 to 5 scale, with 5 being the highest. That was the same level as the 2008 survey, and down from 4.6 in 2006.

   -- Failure of the agent to "negotiate aggressively on my behalf" was cited by 82% of respondents as the reason for their dissatisfaction, up from 81% the previous year.

  -- About one-fifth of buyers (21%) said they did not know the terms of their loan or were unsure. Buyers of foreclosed homes said they were more informed, with only 12% saying they did not understand or were unsure of their loan terms. If you remove foreclosure buyers from the pool, fully 31% of "regular market" buyers said they did not understand or were unsure of their loan terms.

    The CAR survey was conducted by telephone with 1,400 people who bought homes in the second half of 2008.

    -- Peter Y. Hong

I am shocked!

Pasadena-area broker Doug Willis posted a disturbing report from the field on his blog last week. He says an agent representing someone short-selling a house told him the place could be his if Willis' client would throw in a sweetener: $15,000 cash, under the table.

As Willis points out in the item titled "Would You Mind Repeating That?"  such a payment would defraud the lender holding the note on the property  and would also constitute fraud and tax evasion by not disclosing the terms of the sale.

Willis said he left a phone message for the brokerage representing the seller, but when I spoke to him late Friday, he'd not heard back.

As real estate activity picks up this spring, perhaps we'll see more shady activity as well.

Anybody else have some recent shenanigans to share?

-- Peter Y. Hong

Southern California Home Buyer's Fair this weekend

Need help figuring out how to buy a home? The Southern California Home Buyer's Fair -- sponsored by the real estate industry and the L.A. Times -- might offer some tips.

Realtors, economists and other professionals will be on hand to break down the process of home buying, finding and buying foreclosures, monitoring and fixing credit, finding and qualifying for home loans and other topics in more than 50 how-to seminars and 75 exhibit booths.

Admission is free; the first 200 people who show up each day get free movie tickets. 

The second annual conference is sponsored by the California Assn. of Realtors and the Los Angeles Times and will be held at the Los Angeles Convention Center on Saturday from 10 a.m. to 5 p.m. and Sunday from 11 a.m. to 4 p.m.

Representatives from the Realtors association will also be on hand to discuss their Mortgage Protection Program, which offers qualifying first-time home buyers who are laid off as much as $1,500 a month to help make their mortgage payments.

For more information on the fair, check out http://www.homebuyersfair.com/.

-- Nathan Olivarez-Giles

The agents who passed the sniff test

Candy Spelling's selection of agents to list her $150-million Holmby Hills estate is also mentioned in the Associated Press story:

Spelling told the Associated Press that she let her dog Madison, a soft-coated Wheaten terrier, help pick out the best real estate agent for the task. She had her security bring the dog into the room every time she met one of the candidate agents and watched how the dog reacted. If Madison didn't like them, Spelling crossed them off the list.

So who passed the sniff test? From the Wall St. Journal:

Sally Forster Jones of Coldwell Banker Previews has the listing together with Jeffrey Hyland and Rick Hilton, both of Hilton & Hyland/Christie's Great Estates.

Hopefully the commissions will make up for knowing they were selected by a terrier.

-- Lauren Beale

Thoughts? Comments?

Photo: Candy Spelling, mother of actress Tori Spelling and widow of television producer Aaron Spelling, with her dog Madison in her palatial Los Angeles home.

Best Web property search, broker?

     This morning's Redfin announcement that they'll add agent reviews to their site reminded me that it's been a while since we've had a discussion on online home search sites and brokers. In 2007, LA Land commenters favored ZIP Realty over Trulia, saying it had more comprehensive listings.

     With more sites available now, and Realtor.com and MLS sites upgraded substantially since our last survey, which sites do you find most useful ?

-- Peter Y. Hong