More homeowners than ever are selling at a loss!
The real estate Web site Zillow.com has reported that in the 12 months that ended June 30, nearly 25% of all homes sold nationwide fetched less than sellers originally paid. Other interesting facts from this report showed:
A. In Merced, Calif., 63% of homes sold during the past 12 months brought in less than what the owner paid. Prices there have fallen 40% over the past 12 months and 56% from their 2006 peak.
B. About 63% of sellers in Stockton, Calif., lost money during the same period, 60% in Modesto, Calif., 55% in Las Vegas and 38% in Phoenix.
C. In Merced, 74.9% of sellers took a loss when they sold during the three months ended June 30 compared with just 28.7% during the same period in 2007.
What happened to all the home buyers in 2006 who thought they had gotten a great home buys when compared to the 2005 homes sale prices? From the same Zillow report we can now see the real answer to this question:
In Stockton, Calif., 2006 buyers now owe a median of nearly $171,000 more than their homes are worth. In Salinas, Calif., 2006 buyers now have median negative equity of $161,000, and in Merced, the figure is nearly $160,000.
Though not in in the report, I would venture to say that one would be hard pressed to find any 2007 home buyers whose homes are worth more today, that what they paid! San Diego California investment property sales
Greenspan … Housing Bottom In Sight
Former Federal Reserve chairman Alan Greenspan said this week "Home prices in the U.S. are likely to start to stabilize or touch bottom sometime in the first half of 2009, prices could continue to drift lower through 2009 and beyond." Let's all hope he is right. But, a quick review of his past real estate bust comments, shows that this week's bottom call is Greenspan's third such prediction.
First in late 2006, the former fed head said: "I suspect that we are coming to the end of this downtrend, as applications for new mortgages, the most important series, have flattened out. I don't know, but I think the worst of this may well be over."
The second Greenspan call was in April 2008, when he said "the drop in U.S. home prices will probably end well before' early next year as the number of houses on the market diminishes, aiding an economic rebound."
Will this week's Greenspan market bottom call be any more accurate than his prior two calls? I personally hope so! But, I do have my doubts. It used to be that when Greenspan spoke one was never really sure of exactly what he was saying. Now, his latest comments are crystal clear…Hmm! San Diego income property sales
NEW SINGLE-FAMILY HOME CONSTRUCTION DECLINES 3.5 PERCENT IN JUNE
Construction of new, single-family homes across the country as reflected by issued building permits in June declined 3.5 percent to 613,000 units, compared with 635,000 units in May, according to the latest data from the U.S. Dept. of Commerce. Nationwide, total new home construction in June was at 1,091,000 units, 11.6 percent higher than the revised May rate of 978,000, but 23 percent below June 2007. Housing starts were up 0.9 percent in the West.
Another Look at the June Rise in Pending Home Sales
On a year-over-year basis, pending home sales are DOWN 12.3 percent. The real key for the San Diego housing market is NOT home sales, but, home prices! To me, today's San Diego anemic housing activity indicates that home prices will continue their fall and even accelerate in Winter as home prices approach 50% of their 2005 highs in many communities. San Diego income property sales
The number of existing homes entering the purchase contract stage during June rose 5.3 percent after a downwardly revised decline of 4.9 percent in May. Sounds good at first blush, but, in San Diego and most other housing bubble areas, it is estimated that One-third of all home sales are now distressed properties.
Credit Impact of Real Estate Short Sales & Deeds In Lieu
Many San Diego homeowners mistakenly believe that their credit rating will be better off with a short sale vs. a foreclosure. This belief may be seriously flawed.
Short sales, deeds in lieu of foreclosure and foreclosure usually don't minimize the impact on a borrower's credit score. All three proceedings have roughly the same negative impact on an individual's credit score, according to Craig Watts, a spokesman for Fair Isaac Corp., which created the widely used FICO score.
Mr. Watts says that to date little analysis has been done distinguishing, for instance, the credit risk of individuals who completed a short sale versus those involved in a foreclosure. For that reason, "the model ends up treating them [a short sale, a deed in lieu of foreclosure, and a foreclosure] all the same." San Diego income property
Reworked Subprime Loans … 40% End Up Defaulting
Moody’s Investors Service: More than two of every five subprime borrowers whose mortgages were reworked in H1’07 are defaulting anyway. Among subprime adjustable-rate mortgages modified in H1’07, 42% were at least 90 days late on March 31. Modifying loans granted to consumers with poor credit records has gained favor as record numbers fail to keep up with payments and home prices tumble. San Diego California real estate