Andrew Hartland's Blog

HIGHLIGHTS

- Sales up, prices down in 2011.

- California Association of REALTORS® forecast for 2012.

- The number of properties owned by the banks was down 15.5% year-over-year.

Single-family, re-sales home sales were up 0.5% last year.

Unfortunately, after a nice gain in 2010, prices were down. The median price for homes dropped 5.3% and the average price was off 1%.

Condo sales in the county were up 12.2% over 2010.

The median price for condos dropped 13%.

THE CALIFORNIA ASSOCIATION OF REALTORS®
expects the median home price to increase 1.7% in 2012. They forecast sales to increase by 1%.

“2012 will be another transition year for the California housing market, as the continued uncertainty about the U.S. financial system, job growth, and the stability of the overall economy remain in the forefront for all market participants,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.

“An improvement in job growth, consumer spending, and corresponding gains in housing are essential to a broader recovery in the economy, but would-be buyers will remain cautious as they weigh these myriad uncertainties against the clear opportunities presented by today’s very affordable housing market.

“The most likely scenario is for the modest recovery to continue, and this should push sales up slightly next year by 1 percent and maintain levels that are significantly higher than those recorded during the depths of the housing downturn.

“The wild cards for 2012 are many, including federal, fiscal, monetary, and housing policies; the contentious political climate during an election year; and the strength of the U.S. economic recovery,” said Appleton-Young.

DECEMBER MARKET STATISTICS
Sale of single-family, re-sale homes ended the year on a high not, up 8% in December from November. Year-over-year, home sales were off 3.6%.

Condo sales were up 10.5% from November, and were up 12.5% year-over-year.

The median price for homes was down 4.5% year- over-year. This is the fourteenth month in a row the median price for homes has been lower than the year before.

The median price for condos was off 11.3% compared to last December.

Inventory of both homes and condos continues to be weak, which should be good for prices. Home inventory was down 28.5% compared to last December: 1,452 homes actively listed. Condo inventory was down 48.2% year-over-year.

Please remember, while statistics are nice, they will not determine the price you pay or get for a property. That will come down to you and the buyer or seller.

HIGHLIGHTS

- Pending sales up 9.2% year-over-year, nationwide.

- Notices of default dropped in October.

- The number of properties owned by the banks was down 14.4% year-over-year.

Pending sales were up 10.4% in October compared to September, and up 9.2% year-over- year, according to the National Association of REALTORS®.

Lawrence Yun, NAR chief economist, said improved contract activity is a hopeful sign. “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years. We hope this is indicates more buyers are taking advantage of the excellent affordability conditions,” he said.

“Many consumers are recognizing that home buyers in the past two years have had one of the lowest default rates in history. Moreover, continued inventory declines are another healthy sign for the housing market,” Yun added.

“Although contract signings are up, not all contracts lead to closings. Many potential home buyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as cancelling an old credit line while taking on a new one,” Yun said. “Such actions could unwittingly prevent buyers from obtaining a mortgage if their credit score is close the margins of qualifying, or they might get a loan but with less favorable terms.”

NAR encourages consumers to be aware of their credit score and actions which could hurt or enhance it.

http://houselogic.com, the association’s consumer website devoted to all aspects of homeownership, offers tips for improving credit scores at http://tinyurl.com/27czzgb.

MARKET STATISTICS
Sale of single-family, re-sale homes fell 4.8% in November from October. Year-over-year, home sales were off 5.9%. Year-to-date, home sales are flat.

Condo sales were off 2.5% from October, but were up 26.9% year-over-year. Year-to-date, condo sales are up 12.3%.

The median price for homes was down 5.1% year- over-year. This is the thirteenth month in a row the median price for homes has been lower than the year before.

The median price for condos was off 12.5% compared to last November.

Inventory of both homes and condos continues to be weak, which should be good for prices. Home inventory was down 28.9% compared to last November: 1,672 homes actively listed. Condo inventory was down 46.1% year-over-year.

Please remember, while statistics are nice, they will not determine the price you pay or get for a property. That will come down to you and the buyer or seller.

HIGHLIGHTS

- HARP being expanded.

- Foreclosure starts surge in August.

- Home and condo sales outpacing last year.

The Home Affordable Refinance Program, or HARP, is being revamped. It was originally aimed at a housing market that had an estimated 5 million struggling homeowners. Unfortunately, HARP’s original terms and limits were so restrictive that the program, to date, has reached fewer than 900,000 mortgage holders. The major restriction eliminated any homeowner whose existing mortgage represented more than 125% of the loan-to-value of their home.

The revamping of HARP will let borrowers whose mortgages are backed by Fannie Mae and Freddie Mac refinance those underwater mortgages, presumably no matter how far their home’s value has fallen. In fact, current loan-to-value ratio on the existing mortgage must be greater than 80 percent.

And, mortgage holders can’t double-dip; that is, if they already have an earlier HARP loan, they can’t get another at the even better rate of 4%. The new terms also eliminate the need for yet another property appraisal in calculating LTV, and the program’s end date has been extended.

The plan, announced last week still has certain eligibility limits. For example, your mortgage has to be a Fannie Mae or Freddie Mac instrument, owned or guaranteed by one agency or the other, and you must not have missed any payments in the last six months (since April 24, at present), or have more than one missed payment over the last year.

The FHFA, or Federal Housing Finance Agency, which currently controls Fannie, Freddie, and 12 other Federal Home Loan Banks – located in Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, Seattle and Topeka – is expected to announce the final program parameters by November 15.

This is a much needed expansion of the program. Unfortunately, there are over ten million homeowners underwater and this new HARP will only be available to 10% of them.

MARKET STATISTICS

Sale of single-family, re-sale homes fell 4.9% in October from September, but were up 2.4% year- over-year. Year-to-date, home sales are up 0.5%.

Condo sales were up 3.8% from September and up 12.5% year-over-year. Year-to-date, condo sales are up 11.1%.

The median price for homes was down 13.9% year-over-year. This is the twelfth month in a row the median price for homes has been lower than the year before.

The median price for condos was off 4.1% compared to last October.

Inventory of both homes and condos continues to be weak. Home inventory was down 25% compared to last October: 2,014 homes actively listed. Condo inventory was down 44.2% year- over-year.

Go to my on-line site SCVReport.com for the full report, plus a city-by-city breakdown.

If you would like to search for properties in the Santa Clara Valley, go to my online search form at: MLS Search

If you find the Santa Clara Valley Real Estate Report useful and know someone else who might, please feel free to forward this e-mail to them. There is also a four page printable version with more articles here:
Printable Report.

- In Santa Clara County, notices of default and notices of sales have been declining for the past year.

- Median price for homes was up 3.4% from April, but down 4.5% year-over-year.

- Home sales off 19% from last May.

Two years talk of phantom inventory was all the rage. There are three components to phantom inventory: first, all the property the banks owned that hadn’t been put on the market, second, all the property on which a notice of default had been filed but had not yet gone back to the banks, finally, there are strategic defaults. These are the property owners who are underwater, meaning they owe more on the property than it is currently worth and have decided to walk away.

Last month, JPMorgan Chase analysts determined that strategic defaults were declining. In their analysis, they found 60% of all defaults were strategic by the middle of 2009, and that this had declined to 30%.

It is important to note these are national figures.

In Santa Clara County, notices of default and notices of sales have been declining for the past year.

County Statistics
Sales of single-family, re-sale homes fell in May, an unusual occurrence, falling 3.1% from April, and down 19% year-over-year.

The median price for single-family, re-sale homes in Santa Clara County was up 3.4% from April, but down 4.5% year-over-year. This is the seventh month in a row the median price has been lower than the year before.

Pricing momentum…
while still positive, has been trending down for the past seven months and now stands at +2, a decline of three points from the month before.

Sales momentum…
turned down last month and dropped four points to –9.

Pending momentum…
a harbinger of future sales, while still positive, has also been trending downward. Last month the number was +1, a decline of four points.

More Statistics…
Year-over-year, home inventory was down by 3.4%.

Pending inventory was down, year-over-year, for the seventh month in a row: 5.4%.

The sales price to list price ratio rose 0.2 of a point to 99.6%.

In the condo market…
The median price for condos was down 17.6%, year-over-year.

Condos sales were down 14.1% year-over-year.

Pending condo sales declined last month, falling 9.6% compared to last May.

Inventory increased for the twelfth month in a row, up 1.2% year-over-year.