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.

- Mortgage rates reach record lows.

- Foreclosure starts surge in August.

- Prices for homes down, year-over-year, for the eleventh month in a row.

Thirty year fixed mortgage rates are down in the low, very low, 4% area.

Which is great for those who have the down payment, minimum 3.5% for FHA-backed loans and 5% for bank loans, and can qualify. Those few, those lucky few. (With all credit to Shakespeare’s St. Crispin’s day speech.)

Then there are the people who would love to refinance, but are underwater. So sorry!

Then again, this is Silicon Valley!!! Where many of the rules that apply to normal people don’t exist. Dot.com and IPO millionaires are pushing prices up in select cities, where multiple offers rule. Of course, these buyers are usually taking out jumbo loans which are about one percent higher.

Record low interest rates are having NO affect on the market.

In other news, foreclosure starts surged in August, with Bank of America leading the way by nearly doubling their initial notices of foreclosure, according to http://foreclosureradar.com.

In Santa Clara County, According to http://foreclosureradar.com, the number of bank-owned properties, called REOs, in Santa Clara County have averaged about 2,200 for the past thirteen months.

In the MLS, there are 255 properties listed for sale as REO. We are only counting active listings, not pending-continue to show, which the MLS counts as active.

There are 302 REO properties pending.

That totals 557 REO properties either for sale or in escrow. That’s only 25% of all bank-owned properties in play.

MARKET STATISTICS

Sale of single-family, re-sale homes fell 15.3% in September from August, but were up 0.4% year-over-year. Year-to-date, home sales are up 0.3%.

Condo sales followed a similar, down 19.4% from August and up 8.3% year-over-year. Year-to-date, condo sales are up 10.9%. There have been more condos sold this year than any year since 2007.

The median price for homes was down 9.2% year-over-year. This is the eleventh month in a row the median price for homes has been lower than the year before.

The median price for condos was up 0.5% compared to last September, breaking a string of twelve months in a row where the median price had been lower than the year before.

Inventory of both homes and condos continues to be weak. Home inventory was down 26.5% compared to last September: 2,154 homes actively listed. Please note, only active listings are included in this figure. Numbers from the local associations include properties that are also in a pending status, meaning they have an accepted offer, but haven’t been taken off the market.

Condo inventory was down 41.7% 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.

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.

Sincerely,

Andrew Hartland
Broker/Owner

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- 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.

HIGHLIGHTS

- Home sales up year-over-year fourth month in a row.

- Median price for homes was up 3.1% from March, but down 7.5% year-over-year.

- Foreclosure notices surge in March from February, but were down compared to last year.

Sales of single-family, re-sale homes continued to rise in April, gaining 3.4% from March, and up 11.2% year-over-year. This is the fourth month in a row home sales have been higher than the year before. Prior to this period, home sales been lower than the year before for seven months in a row.

The median price for single-family, re-sale homes in Santa Clara County was up 3.1% from March, but down 7.5% year-over-year. This is the sixth month in a row the median price has been lower than the year before.

The average price was up 3.6% from March and posted a 1.1% year-over-year gain. The rise in the average price reflects increased activity in the luxury end of the market.

Sales momentum…
stopped trending downward in January. Last month it gained one point to –5.

Our momentum stats are calculated using a 12-month moving average to eliminate seasonality. By comparing this year’s 12-month moving average to last year’s, we get a percentage showing market momentum.

Pending momentum…
a harbinger of future sales, while still positive, has also been trending downward. Last month the number was +5, a decline of six points.

Pricing momentum…
while still positive, has been trending down for the past six months and now stands at +5, a decline of three points from the month before.

More Statistics…
Year-over-year, home inventory was down for the first time since last June: 5.6%.

Pending inventory was down, year-over-year, for the fifth month in a row: 4.2%.

The sales price to list price ratio was flat at 99%.

In the condo market…
the median price was down 18.8% year-over-year. The average price was also down, dropping 4.6% year-over-year.

Condos sales were up for the fourth month in a row, gaining 13.1% year-over-year.

Pending condo sales declined last month, falling 22.4% compared to last April.

Inventory increased for the eleventh month in a row, up 7.2% year-over-year.