homesmillbrae.com » First Quarter

Housing Investors Cool on Buy-to-Rent Model

Fri, 07 Jun 2013 19:01:59 +0000

Nearly half the investors surveyed said they planned to cut back on purchases of homes in the coming year; in a survey last August, just 30 percent said they planned to cut back. Only 20 percent of investors said they plan to increase purchases, compared with 39 percent who said they would last August.

All this could have a significant impact on the housing recovery.

(Read More: Reverse Mortgages Backfiring on Seniors)

“If the investors gets sidelined—along with first-time buyers who are already sidelined—this housing market falls apart quickly,” says Mark Hanson, a California-based housing and mortgage analyst. Hanson points to still-high levels of negative equity, which has kept many homeowners stuck in place.

Connecticut-based Carrington Mortgage Holdings, a hedge fund that had been buying distressed homes, recently stopped.

“We think the market is a little bit too frothy,” said Carrington’s Rick Sharga in an interview last month. Home prices are now up 12 percent from a year ago nationally, according to CoreLogic, but have risen far more greatly in formerly distressed markets where investors originally focused their purchases.

“The general consensus right now is that the bargains are drying up when it comes to buying foreclosed properties,” adds Sharga.

(Read More: Rising Rates Turn Investors From REITs)

That is largely due to a lack of distressed homes for sale. The number of foreclosure sales in the first quarter of this year fell 22 percent from a year ago, according to RealtyTrac, a real estate website. The number of short sales, when the home is sold for less than the value of the mortgage, also fell, as rising prices provided less incentive for banks to agree to such deals. Some claim banks are actually holding onto repossessed homes, waiting for prices to rise higher.

Investors accounted for 19 percent of home sales in April, according to the National Association of Realtors, down from 24 percent in all of 2012. Investors include individual buyers as well as large hedge funds, but the hedge funds have been getting much of the attention, credited with juicing prices in the hardest hit housing markets like Phoenix and Las Vegas. Their so-called REO-to-Rent strategy (Real Estate Owned-to-Rent) has evolved into a new asset class, with two of the companies that engage in the practice going public this year as real estate investment trusts (REITs).

Article source: http://www.cnbc.com/id/100799067

Inventory Shortage Means Fewer Home Sales, Higher Prices in Bay Area

Tue, 07 May 2013 02:37:35 +0000

A chronic shortage of homes on the market added up to fewer homes sold and sharply higher home prices across the entire nine-county San Francisco Bay Area in the first quarter of 2013, according to an analysis of MLS data by the research division of Better Homes and Gardens Mason-McDuffie Real Estate.

According to the company, sales of existing, single-family detached homes in the Bay Area fell to their lowest level in five years. Only 9,985 homes changed hands in the first quarter, down 25 percent from 13,391 homes sold in the fourth quarter of 2012 (a difference of 3,406 homes sold) and 16 percent below the 11,906 homes sold during last year’s first quarter. Contra Costa County reported the greatest number of homes sold with 2,182, followed by Alameda County (1,977 homes sold) and Santa Clara County (1,972 homes sold).

Despite the downturn in home sales, demand from homebuyers remained robust, and that led to higher home prices. The Bay Area as a whole reported a median sales price of $667,021 in the first quarter, up 10 percent from the previous quarter’s median price of $604,863 and 25 percent higher than the median sales price of $520,834 reported at the conclusion of last year’s first quarter.

All nine Bay Area counties reported double-digit, year-over-year increases in their median sales price for the second consecutive quarter. San Mateo County led the way with a 43 percent annualized increase, followed by Alameda County (+33%), Contra Costa County (+31%), and Santa Clara and Solano counties, which reported 30 percent year-over-year increases. San Mateo County recorded the region’s highest median sales price at $1,075,097, followed by the City and County of San Francisco at $1,052,626 and Marin County at $878,945. Solano County recorded the Bay Area’s lowest median sales price at $243,006.

Behind the decline in sales and increase in prices is the continued lack of inventory. As of the final day of the first quarter (March 31, 2013), only 4,098 existing, single-family detached homes were listed for sale in the entire nine-county Bay Area – an improvement from 3,370 homes on the market at the end of the fourth quarter of 2012 but nonetheless down 55 percent from 10,282 homes available for purchase on the final day of the first quarter of 2012.

Once listed, homes sold at a brisk pace. For the Bay Area as a whole, homes were on the market an average of 54 days before receiving a final purchase offer, down from 55 days in the fourth quarter of 2012 and 74 days in the first quarter of last year. Homes in Alameda County sold in an average of 29 days, while Napa County recorded the highest average with 94 days on the market.

Looking ahead, what’s the bottom line for Bay Area homebuyers and sellers?

Buyers need to bring their “A” game to the negotiating table, and that increasingly means being able to offer more than the listing price and waive appraisal and other contingencies that may add to the ultimate price. An experienced REALTOR® with extensive local market knowledge and negotiation skills is a must in a market where all-cash offers continue to be a factor.

“Given the likelihood that inventory will continue to be an issue in the months to come, homeowners with mortgages that are “above water” (or nearly so) may find now is a good time to list their home,” says Keith Robinson, COO. “While prices are rising, it is important that sellers price their home competitively. Again, working with an experienced REALTOR® who can help price the property for sale and vet the offers that follow is critical.”

For more information, visit www.bhghome.com.

Article source: http://rismedia.com/2013-05-06/inventory-shortage-means-fewer-home-sales-higher-prices-in-bay-area/

Fannie Mae’s New CEO: ‘Comfortable’ With Decision Not to Slash Mortgage Balances

Thu, 09 Aug 2012 12:43:20 +0000

Fannie Mae is no longer bleeding cash, at least for now.

After devastating losses since 2008, the mortgage giant reported its second straight quarter of positive net income, even after making a $2.9 billion dividend payment to the U.S. Treasury. Fannie Mae has taken $117.1 billion from the Treasury since the fall of 2008.

Improving home prices and decreasing mortgage delinquencies have helped to boost the bottom line, but Fannie Mae’s CEO Tim Mayopoulos, who took the reigns of the company earlier this summer, says he’s not convinced housing is out of the woods yet.

“I think it’s too early to declare a national housing recovery,”Mayopoulos said in an interview Wednesday on CNBC. “What’s driving our results has been home price improvements. We are not expecting to see huge improvements going forward.”

Fannie Mae reported net income of $5.1 billion in the second quarter of this year, up from $2.7 billion in the first quarter. Foreclosures, however, still weigh heavily on the balance sheet, despite the far higher quality of loans in the new book of business since 2009. 59 percent of Fannie Mae’s single-family guaranty book of business as of the end of the second quarter consisted of loans it had purchased or guaranteed since the beginning of 2009.

Expectations of an improving housing market prompted Fannie Mae to reduce its future loan loss reserves to $68 billion from nearly $77 billion in the first quarter. The company notes in its report that it believes credit-related expenses will be lower in 2012 than in 2011. Mayopoulos, again, seems to hedge that somewhat.

“We are very excited about the new book of business we’ve been writing since the beginning of the crisis. We believe that we could be profitably going forward but it doesn’t mean we will necessarily make enough every quarter to be able to cover the entire dividend payment to the Treasury,” said Mayopoulos, who added that he is very comfortable with where Fannie Mae’s underwriting standards are now, despite criticism from housing industry players who claim credit is too tight.

Mayopoulos expects home prices to bounce around more before finding a solid bottom, and that will in turn keep millions of borrowers, around 11 million by several recent accounts, in a negative equity position, owing more on their mortgages than their homes are currently worth. The Obama administration has been pushing hard for Fannie Mae and Freddie Mac to participate in the government’s program that pays lenders to reduce balances on troubled loans. Last week, however, Fannie Mae and Freddie Mac’s conservator, FHFA director Edward DeMarco, said the mortgage giants would not participate in that program.

“We are comfortable with where Director Demarco came out. We believe that we have the tools here at Fannie Mae to really help homeowners in terms of doing modifications and to help people who are in distress,” Mayopoulos said.

Fannie Mae completed 35,332 loan modifications in the second quarter, down from 46,671 in the previous quarter. It also approved just over 24,000 short sales and deeds-in-lieu of foreclosure, up from just over 22,000 in the previous quarter. Refinances were far higher, with Fannie Mae acquiring 247,000 of those loans in the quarter.

Fannie Mae still has over 109,000 foreclosed properties on its books, despite selling more of them than they took in during the quarter. Its foreclosure rate is falling as are its loan delinquencies, but the legacy losses are still quite large. Fannie Mae has been experimenting with bulk sales of foreclosures as well as bad loans to investors.

As for the future of the mortgage giant, which along with Freddie Mac and FHA accounts for around 90 percent of all new mortgage originations, Mayopoulos said he would leave that to policy makers. Until then, he is somewhat hopeful that Fannie Mae will continue on its own path to recovery.

“We do think over the long term Fannie Mae can have strong profitability and can return a considerable amount of value to taxpayers, but over the next few quarters I think it’s going to really depend on housing prices and other factors.”

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48570817?__source=RSS*blog*&par=RSS

Renter Nation Rages On

Sat, 28 Jul 2012 11:25:13 +0000

The supply of empty homes for rent is falling, and the nation’s homeownership rate is hovering near a fifteen year low.

How can that be when the housing market is finally turning around and more homes are selling?

The answer is simple: Investors.

The nation’s home ownership rate ticked up a statistically insignificant basis point, from 65.5 percent in the first quarter of this year to 65.6 percent in the second quarter, according to the U.S. Census Bureau. Q1 was the lowest home ownership rate since 1997 and is down from the peak of 69.4 percent in 2004.

Given that home sales improved significantly during the first half of this year, you would think that home ownership rate should have surged higher, but the rate is calculated using only owner-occupied homes. If an investor buys one home or 100 homes, those homes are not even put into the calculation because they owner doesn’t live in the homes. Realtors estimate around 20 percent of homes sales are currently to investors, but given bulk deals offered by the government and banks on foreclosed properties, that percentage is likely higher.

“The very modest increase in the homeownership rate in Q2 does not persuade us to alter our view that the share of the population who own their home will fall further over the next couple of years,” writes Paul Diggle of Capital Economics. “Meanwhile, supply conditions in the rental market are tightening, with a falling proportion of single and multi-family rental homes vacant.”

Rental vacancies in fact fell to their lowest rate since 2001. That is why so many investors are rushing in to buy distressed properties. The rental market his hot and getting hotter. Average asking rent rose 5 percent from a year ago, though they are down slightly from the previous quarter.

Since the peak of home ownership in 2004, six and a half million additional U.S. households are renting, which Diggle calculates is equivalent to 90 percent of the increase in total household numbers over that time. He estimates home ownership will fall to 64 percent over the next two years.

An investor-driven recovery in home sales is certainly positive and is helping to clear the huge backlog of distressed properties on the low end; investors are necessary now, but until real owner-occupants, including the all-important first-time home buyer, return, a robust recovery in all price tiers of the market will remain out of reach.

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48354027?__source=RSS*blog*&par=RSS

Bay Area home sales off to best start since 2005

Sat, 05 May 2012 01:59:41 +0000

The housing market in the Bay Area is off to a strong start and is on pace to be one of the best years since the bust days. Bay area brokerage firm Pacific Union’s real estate report of real estate activity for the first quarter shows buying activity up all over the bay despite supply being at record lows.

Even with inventory (listings) down compared with the same period last year, buyer demand drove an increase in the number of homes sold in Q1 in all our regions. If this trend continues, the total number of homes sold this year could reach 20,850 – and exceed the 10-year average in the Bay Area for the first time since 2005.

While the number of homes changing hands is jumping, price levels overall, on average, are down 1%. The first quarter report from Better Homes and Gardens Mason-McDuffie Real Estate shows San Francisco and Napa’s median price increasing by 4% and 7%, while Alameda’s median dropped by 10% compared to the first quarter of 2011. Slim pickings are sparking multiple offers with quality homes in favored locations as inventory is down by more than half compared to last year.

As of the final day of the first quarter, 7,703 existing detached homes were listed for sale across the entire Bay Area, down a staggering 54 percent from 16,669 homes on the market on the same date a year ago.

Even with the lack of homes on the market, it looks like buyers are out of the gates. In my local Marin neighborhood, newly listed homes that had a hard time selling a year or two ago, where they lingered for over 100+ days and were finally pulled, are getting snatched up within 2-3 weeks. With the traditional buying season just beginning and the Facebook IPO on its way, this sets the stage for an interesting summer.

Courtesy of Better Homes and Gardens Mason-McDuffie Real Estate

Article source: http://blog.sfgate.com/ontheblock/2012/05/04/bay-area-home-sales-off-to-best-start-since-2005/

Signs of a Turnaround in San Francisco’s Luxury Real Estate Market

Mon, 13 Jun 2011 07:23:02 +0000

San Francisco, CA (PRWEB) June 09, 2011

San Francisco’s luxury home market is showing signs of a turnaround, according to prominent Bay Area Realtor Cece Doricko, who specializes in Forest Hill, Pacific Heights, Cow Hollow and St. Francis Wood, CA real estate. Citing figures from Coldwell Banker’s latest San Francisco Luxury Market Report, Doricko reports a 13.6 percent increase in the number of home sales in the first quarter of 2011 as compared to that of the same period last year.

“Buyers of Pacific Heights luxury real estate and other luxury properties in San Francisco are starting to make their presence felt once again,” says Doricko, “and it’s not surprising why. Homes in these kinds of neighborhoods have always been sought-after and now there are quite a few that are priced lower than they have been for some time. It’s no wonder, then, that buyers who have the means are not letting these opportunities pass them by.”

On a year-over-year basis, the median sale price of San Francisco luxury real estate went down by 4.3 percent in the first quarter though it shows an increase of 3.9 percent when compared to the fourth quarter of 2010. “You won’t be seeing any dramatic price dips in these neighborhoods,” says leading Forest Hill, San Francisco Realtor Doricko. “Properties in areas like Forest Hill and Pacific Heights have always been at a premium, so whatever price declines you’re seeing now are likely to be it, especially since luxury home sales are already trending upwards.”

Doricko, whose area of expertise includes Cow Hollow, San Francisco luxury homes and properties in Lower Marin County, recently launched a new real estate website, CeceDoricko.com, in anticipation of the market’s eventual recovery. “When people start buying homes again, they are going to need all the relevant and up-to-date information that they can get and this is what I aim to provide via this website.”

To begin exploring the San Francisco luxury home market and to learn more about Doricko’s real estate services, visit her new site, CeceDoricko.com.

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For the original version on PRWeb visit: www.prweb.com/releases/prwebSanFranciscoRealtor/CeceDoricko/prweb8529269.htm

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/06/09/prweb8529269.DTL

Foreclosure Sales Centered in Few States, So Why Should We Care?

Thu, 26 May 2011 16:11:17 +0000

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Earlier this week, when we got the report of a bump up in sales of newly constructed homes, I cautioned that the home builders are still facing huge competition from distressed properties (foreclosures and short sales). Today we have some new numbers showing just how big and how widespread that competition is.

Foreclosed properties made up 28 percent of all home sales nationwide in the first quarter of this year, according to RealtyTrac.

That’s up slightly from Q4 of 2010, but not the record 29 percent we saw a year ago. More than 107,000 bank-owned (REO) properties sold, which is actually a drop from the previous quarter and a bigger drop (36 percent) from a year ago. Foreclosed properties sold at a 35 percent discount to their non-distressed counterparts.

So here we have fewer selling but making up a larger share of total sales. That’s not particularly healthy. We need to get more of these properties sold, because as I showed you on the blog Tuesday, there are hundreds of thousands of them and millions more in the potential pipeline.

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Article source: http://www.cnbc.com/id/43182211?__source=RSS*blog*&par=RSS

Negative Equity Doesn’t Always Have to Mean Goodbye

Wed, 25 May 2011 21:24:40 +0000

The San Francisco Examiner reported a few weeks ago that “the percentage of “underwater” homes — worth less than they are mortgaged for — rose sharply in San Mateo County in the first quarter of this year. In the first quarter, 17.5 percent of all borrowers there were under water, up 6 percent year-over-year.

And they think they have problems?

When the Marin County Assessor’s Office released its records for April, at first there seemed to be reason for celebration in Novato. Overall sales of single-family homes were up 33 percent month-over-month, to 36. Industry veterans who remember the nuclear winter of 2008-2009 will recall months like February 2009, when only 10 homes changed hands in Novato. The market was frozen and looking at a long thaw.

It’s good that homes are again selling in Novato. And if we only look back a few months, we’ll see that prices are rising as well. The average property in Novato has gained back more than 20 percent of its value since January. As long as we remain focused on 2011, the outlook is good; gotta keep those pesky memories of 2006 and 2007 at bay.

In April 2007, the average single-family home sold in Novato fetched a shade above $900,000. In April 2006, the average price was $952,000. Novato real estate has shed 38 percent of its value in five years. There’s no way to sugar-coat that. In fact, as of January local homes had lost 48 percent of their value in less than five years.

These numbers add up to Novato having a serious negative equity issue, in line with that of California as a whole (33 percent). Still, with cities like Miami experiencing a 25 percent rate not of underwater mortgages but of homes in severe mortgage distress, heading for short sale or foreclosure, the local impact is nowhere near being the worst in the country — or even the state. Novato has suffered more than many other Bay Area cities, but our region as a whole has fared pretty well, comparatively.

For plenty of local homeowners, upside-down mortgages are a reality. Enough of them are suffering that the question now should not be “How many underwater mortgages are there in Novato?” but rather “What should you do if your mortgage slips into negative equity territory?”

As an indicator of a struggling market, negative equity ranks with foreclosures and short sales, but it is not necessarily a precursor to them. One reason foreclosures are up, however, is that a significant number of underwater mortgage holders are choosing to walk away from their properties rather than continue making payments.

A Feb. 2, 2010 article in the New York Times suggests that there is a value-to-loan threshold that owners will not cross before walking away from their home. Once their home’s market value falls below 75 percent of the money owed on their loan, they give up and bug out. While these people are arguably acting with sound financial judgment, they’re also ignoring the many legitimate reasons not to walk away — not all of which are based on emotional attachment to a pile of wood, glass and stucco.

Assuming you are not a speculator, landlord or home-flipper, you purchased your home as a place to live. You did so for a variety of reasons — location, convenience, quality of public schools, square footage, yard — plus the unspoken but understood perk of return on investment. Even if you take away that ROI, you still have all of the other components, plus stability, making a good argument for staying in place. Walk away and what’s the first item on your post-home-ownership agenda? Finding a place to rent, hopefully with a comparable amount of room, convenience and access to good schools. And woe to you if you own pets.

The decision to walk away from an underwater mortgage should not be taken lightly – and should not be made for financial considerations only. Staying in a home burdened with a bad loan requires a paradigm shift. If you can afford your payments and can live with the psychic weight of feeling like an economic patsy, why not stick around and make your house a home, even if it doesn’t make short-term financial sense?

Article source: http://novato.patch.com/articles/negative-equity-doesnt-always-have-to-mean-goodbye

Foreclosure ‘Rocket Docket’ Done

Tue, 24 May 2011 08:43:41 +0000

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Too many foreclosures and too little time.

That was the impetus behind the so-called “rocket docket” in Florida, where judges could blow through a thousand cases a day.

And they had to, given a backlog of close to 40,000 foreclosures.

It was an experiment that began at the very end of December of 2008 in Lee County, Florida, the hardest hit county in the state. Retired judges came back to work, and the cases started to move. Then it went into full swing about a year ago in four other counties.

Now with a backlog of “just 8000 cases,” Lee County court clerk Charlie Green confirms the money for the program runs out at the end of June. I spoke with Green a few years ago, when the program started, and then again this morning. The desperation I remember in his voice is now gone.

“We are absorbing a lot of the foreclosed properties, and hopefully as the job market improves, that will improve,” Green tells me.

He describes an all-cash market in his county, where he also points to a strong tourist season. His big concern is about who will be employed and for how long. He would still like to see more retiree interest from back East and a bigger second-home demand.

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Article source: http://www.cnbc.com/id/43140199?__source=RSS*blog*&par=RSS

Spread of ‘underwater’ foreclosures feared in San Mateo County

Sat, 14 May 2011 20:50:14 +0000

The percentage of “underwater” homes worth less than they are mortgaged for rose sharply in San Mateo County in the first quarter of this year, more than in any other Bay Area county.

San Mateo County homes suffering from what is known as negative equity rose to 17.5 percent in the first quarter of this year as compared to 11 percent last year, Zillow.com reported. The change, driven by falling property values, reflected trends seen at the local, state and even national level.

For data on homes in negative equity by county and foreclosures by city, click on the photo to the right.

The numbers could signal another wave of foreclosures in the making. For residents with homes in negative equity, the options can often come down to either seeking a short sale, meaning a sale for less than the mortgage value of the house — or walking away and letting it fall into foreclosure, said Arton Chau, General Manager of Burlingame-based Home Buyers Alliance.

Chau, who specializes in negotiating short sales, says his clients are either encountering severe economic stress that renders them unable to make payments, or they can make payments but have found it makes more financial sense to let the underwater home go.

“For me, it’s really about getting them out of this difficult situation,” Chau said.

For communities like Daly City, already hit hard by the foreclosure crisis of recent years, the numbers could mean more bad news to come. The city had 791 foreclosed homes this January, down from 884 the previous year but still the highest number in the county.

“The foreclosures are absolute disasters,” said Daly City Councilman David Canepa. “These are the people who have been the fabric of our society. I saw the data, and it doesn’t look like it’s getting any better.”

Canepa said that foreclosures and negative equity impact the city’s source revenue of property tax, as well as the community as a whole. Though a renter himself, Canepa can’t escape the anguish of people losing their homes as he receives about two calls a month from people asking for help.

“It’s heartbreaking, these people are pouring their hearts out. We all got steamrolled by this economy.”

County Supervisor and Daly City native Adrienne Tissier said she began hosting foreclosure workshops three years ago when the first foreclosure wave hit.

“Everyone is talking about the economy coming back a little bit, but the foreclosure issue is still very, very real,” she said.

Tissier’s workshops aim to both help those who are battling foreclosures and those preparing for life after losing their home.

“My hope is if I help at least one person, that’s one more person that isn’t on the street,” she said.

The trend toward increased negative equity was not limited to San Mateo County. In San Francisco, the percentage of underwater homes rose from 8.4 percent this time last year to 21.8 percent, while Bay Area-wide it increased to 25.7 percent from last year’s 22.4 percent mark.

National and state negative equities were also up with the national numbers climbing to 28.4 percent from 22.2 percent last year, and California recording 32.2 percent, up from 28.7 percent.

aterrazas@sfexaminer.com

Article source: http://www.sfexaminer.com/local/bay-area/2011/05/spread-underwater-foreclosures-feared-san-mateo-county