Csira Group Blog

Fast Start to Housing in 2012

Dave — Tue, 31 Jan 2012 23:44:52 +0000

For homes priced below $500,000, 56% of the market, demand is HOT.

The start to 2012 is extraordinary.
The Orange County housing market is revving its engine and is a strong sign that this year is going to be different than all other years since the beginning of the downturn, the autumn of 2005. Many point to 2007 as the last time things were good for housing, but, in terms of activity, it dates all the way back to 2005, more than six years ago. It makes sense that the lower range is where all the activity is at right now; after all, prices plummeted first in the lower range.

This year’s start is very reminiscent to the start of 2010; however, back then demand was artificially stimulated by the looming expiration of the first time home buyer tax credit. Homes needed to be PENDING by April 30, 2010, to take advantage of the credit. Buyers were itching to find a home before the expiration. After the expiration, demand plummeted. This year is completely different. There is no credit to entice buyers to buy. Instead, home values have dropped 35% from the height and interest rates are at historically low levels that we will never see again during our lifetimes. So, rates and values are stimulating a lot of activity. Throw in many housing analysts exclaiming within the last couple of weeks that a housing bottom has definitely been reached. One of those analysts, Ivy Zelman, who correctly called the housing bust, is emphatic that the bottom has been reached and we are at the early stages of a recovery. Could all of this be a coincidence? It is not just speculation; it is what is occurring right now. Right after we celebrated the dropping of the ball in New York and ushered in a New Year, there were almost instant reports of a lot of home buyer activity in Orange County. Homes generating offers right after being placed on the market, multiple offer situations and selling prices very close to their asking prices is what is taking place on the streets in O.C.

In comparing the beginning of this year to last year, the numbers are staggering. Overall, demand, the number of new pending sales over the prior month, is up 15% compared to 2011, totaling 2,528 pending sales. That’s the market as a whole, though. For homes priced below $500,000, demand is up an astonishing 30%. That’s a lot of momentum considering the housing market hasn’t even hit its stride with the beginning of the Spring Market right after Super Bowl Sunday. This is more than an encouraging start to 2012, it is a real sign of a much different housing market for 2012. The lower ranges dropped first, and it will be the lower ranges that will turn the housing market around. For homes priced between $500,000 and $750,000, demand is unchanged compared to 2011. For homes priced above $750,000, demand is off by 16%. So, it is the lower ranges that are on fire. Below $500,000 represents 72% of all demand. The range from $500,000 to $750,000 represents 17% and above $750,000 represents only 11%. In the past two weeks, demand has increased by 308 homes, up 14%. It will be interesting to see where demand goes from here, but it is a pretty safe bet that it will be considerably up.

2012 OC Housing Forecast

Dave — Tue, 24 Jan 2012 23:26:03 +0000

In Orange County, there are three distinctly different markets. It would be a mistake to make decisions based upon expected pricing for the entire county. So, throw out reports of the median sales price and drill down a little bit deeper. Let’s take a look at the three totally different markets. In the lower ranges, we can expect very little change in pricing. Remember, 76% of the market is below $750,000 and 56% can be found below $500,000. I believe that in some unique areas and neighborhoods, the market could even appreciate slightly. But, distressed properties, 47% of the active inventory in the lower ranges, will keep a lid on any real appreciation. For the middle range, homes priced between $750,000 and $1.5 million, we can expect slight depreciation in prices, less than 5%. Since only 15% of this range is distressed, the pressure on pricing is not as great. In the upper ranges, above $1.5 million, distressed properties do not have as much of an impact, only 5%. Instead, there are just far too many sellers and not enough buyers. Values in the lower ranges dropped over night with a flood of distressed homes, and have subsequently stabilized. The upper ranges have not been inundated with distressed properties; thus, the downward movement in values has been a much slower process. In essence, they are arriving late to the party. Prices are a lot stickier with less distress, but applying simple supply and demand rules, success often comes at the hands of more aggressive pricing. In 2012, prices will be most volatile in the upper ranges just as they were in 2011.

Credit: Steven Thomas, Orange County Housing Report

Foreclosure Timelines Shorten

Dave — Tue, 24 Jan 2012 20:54:10 +0000

Foreclosures are getting faster at JPMorgan Chase and Wells Fargo. The two big banks trimmed their foreclosure timelines by as much as 100 days in the third quarter of 2011, helping to work through major backlogs of foreclosed loans, according to a Moody’s Investors Service report. But while foreclosure sales are getting speedier, the report warns that there’s still a long way to go in working through large inventories of REOs that are continuing to slam the nation’s banks.

Chase averaged 264 days from referral to foreclosure sale in the third quarter for subprime mortgages — a big drop from the 412 days it averaged three months prior to that. Chase boasted the shortest time of any of the big five mortgage servicers. Wells Fargo also greatly reduced its foreclosure timeline to 314 days from 454 days compared to the previous quarter.

Please contact the Csira Group for questions relating to foreclosures and short sales at (949) 509-7700.

Proof that Rates are Low

Dave — Tue, 13 Dec 2011 19:48:04 +0000

Fed Chair, Ben Bernanke, knows a good interest rate when he sees it. The Fed chair has refinanced the mortgage on his three-bedroom, attached town home in Washington, D.C. twice since 2009.

Most recently Bernanke refinanced on his home in September shortly after the Fed announced “Operation Twist,” which was a rare move by the Fed to publicly vow to keep long-term interest rates low for the next two years.

Bernanke lives in a town house near the Capitol in Washington, D.C., for which he paid $839,000 in 2004, according to an article in The Wall Street Journal. The home’s appraised value is about $850,000. Bernanke owes $672,000 on his 30-year mortgage, according to the article.

Meanwhile, mortgage rates continue to hover around record lows. The 30-year fixed-rate mortgage fell under 4 percent once again this past week–30-year rates below 4 percent were unheard of until this year. The 30-year fixed-rate mortgage averaged 3.99 percent for the week ending Dec. 8, according to Freddie Mac’s national mortgage market survey. Low rates, mixed with reduced home prices, are pushing Orange County housing affordability to record highs this year. To be introduced to a great lender, contact the Csira Group at (949) 509-7700.

1 in 5 Mortgages Underwater

Dave — Wed, 07 Dec 2011 15:01:09 +0000

More than one in five American home mortgages are underwater.

An estimated 10.7-million households, or 22.1% of all homes with mortgages, had more debt on the properties than they were worth in the third quarter, according to Santa Ana research firm CoreLogic. This is a slight decline from the 10.9 million properties that were underwater in the second quarter.

“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” CoreLogic chief economist Mark Fleming said in a statement. “The nearly $700-billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”

Nevada had the highest negative-equity percentage with 58% of mortgaged homes underwater, followed by Arizona, 47%; Florida, 44%; Michigan, 35% and Georgia, 30%. This was the first quarter that Georgia made the top five, ousting from the group California, which had been among the top spots since the firm began tracking the data in 2009.

In the Los Angeles Metro area, 353,427 homes, or 23% of all mortgaged properties, were in negative equity at the end of the third quarter, a decline from 356,677. Negative equity can decline when foreclosures increase as the repossession process extinguishes underwater loans.

The Csira Group specializes in assisting homeowners who are having difficulties in meeting their mortgage obligations. For a confidential discussion regarding these matters, please contact us a info@csiragroup.com or call 949.500.3283.

Foreclosure Crisis Far From Over

Dave — Thu, 01 Dec 2011 20:18:39 +0000

“The nation is not even halfway through the foreclosure crisis,” suggests a new report from the Center for Responsible Lending, “Lost Ground, 2011.” In the report, the Center for Responsible Lending analyzed 27 million mortgages issued over a five-year timespan.

Researchers found that at least 2.7 million mortgages issued from 2004 through 2008, or 6.4 percent, have ended in foreclosure as of February 2011. Also during that time period, researchers found that 3.6 million households — or an additional 8.3 percent — are still at immediate or serious risk of losing their homes, according to the study.

The Csira Group specializes in assisting homeowners who have found it difficult to maintain their mortgage commitments. Please contact us if we can provide assistance or counseling along these lines.

Congress Restores Higher FHA Loan Limits

Dave — Fri, 18 Nov 2011 18:43:48 +0000

The U.S. House and Senate yesterday restored FHA loan limits to the level they were at before they were allowed to expire at the end of September. As a result, the limits will rise to 125 percent of the area median home price from 115 percent, up to a maximum $729,750 from $625,500. Several hundred counties where FHA loan limits fell at the end of September will now rise back up to the previous level.

“The reinstated loan limits will help provide much needed liquidity and stability to communities nationwide as tight credit restrictions continue to prevent some qualified buyers from becoming home owners and the housing market recovery remains fragile,” said Moe Veissi, president of the National Association of Realtors, in a statement released last night.

President Obama is expected to sign the legislation shortly. The restored loan limits are in a broad-based bill that includes funding for a wide variety of federal operations and programs.

The maximum conforming loan limits for secondary mortgage market companies Fannie Mae and Freddie Mac also expired at the end of September, but lawmakers did not include a restoration of those limits in the bill. As a result, conforming loan limits will remain at 115 percent of the area median home price, up to $625,500.

Once President Obama signs the bill, the limits will go into effect. FHA will release a mortgagee letter to its approved lenders thereafter, containing a list that’s been updated to reflect the new limits. NAR analysts say it will take the agency a short period to update its database and release the mortgagee letter, maybe a couple of weeks.

CA October Foreclosure Report

Dave — Tue, 15 Nov 2011 21:07:47 +0000

Foreclosure Starts in California were little changed in October, after a dramatic increase in August and subsequent fall in September. Other California foreclosure activity was also little changed in October. California foreclosure investors gained traction with 9.9 percent more properties sold to third parties in October, representing a record 28.8 percent of all foreclosure sales. A year ago just 16.9 percent of foreclosures were purchased by third parties.

The increase in investor activities indicates a perceived bottoming of the market. It is conventional wisdom that as investor purchases increase, the market will begin to see an overall upswing. Additionally, even if property values stay relatively flat, it is a fact that rents have been going up at a rapid pace, providing higher returns on investors’ money.

Number of Under Water Homes Increases

Dave — Tue, 08 Nov 2011 19:28:54 +0000

In the third quarter, the number of U.S. home owners who owe more than their homes are currently worth continued to rise, according to new housing data.

Borrowers with negative equity on their homes increased to 28.6 percent — that’s up from 26.8 percent in the second quarter and 23.2 percent a year prior.

“We still have very high negative equity rates; that’s putting extreme pressure on households because temporary job losses translate into foreclosures at much higher rates when the household is in negative equity,” Stan Humphries, Zillow’s chief economist, told Bloomberg.

Recent statistics show that home values dropped from the previous three months in 105 of the 157 housing markets, according to its most recent Home Value Index. The cities bucking the trend and posting some of the largest gains were Detroit, Boston, Denver, and Pittsburgh, according to the index.

Csira Group Joins Surterre

Dave — Mon, 31 Oct 2011 17:59:43 +0000

We are pleased to announce that the Csira Group recently changed from Prudential California Realty to Surterre Properties to better serve our clients.

Surterre is the number one brokerage in Orange County for luxury properties. The company’s high-end marketing, client support, investment in technology and agent-centric model were critical factors in our decision-making process. “We believe this move will result in superior results for our clients by enabling us to leverage Surterre’s network of top-producing agents, get greater reach through Surterre’s Internet presence and by taking advantage of the buyers and sellers who are flocking to this firm” says Dave Csira of the Csira Group.

About Surterre Properties:
Orange County is one of the nation’s most complex and dynamic residential real estate markets – and is home to the world’s most sophisticated clientele. As our local market has evolved over the past decade, we’ve seen the outposts of big multinational firms make way for a new, better breed of luxury real estate brokerage.

Surterre Properties® is driving this change by offering its clients the best of all worlds. On the one hand, Surterre’s highly experienced, proven-successful, locally based agents are dedicated to delivering personalized client service and results. On the other hand, Surterre possesses the strategic vision, marketing acumen and global reach you’d normally find at a much larger company – including the region’s only in-house advertising agency and the industry’s most aggressive Internet marketing program.

In addition, as a certified EcoBroker®, Surterre Properties is committed to taking care of the beautiful environment we call home, by operating with sustainability in mind and by donating a portion of our profits to local environmental organizations.

At Surterre Properties, we consider Orange County our own backyard – and the larger world of luxury real estate our community. We look forward to working with you, wherever your luxury real estate dreams may lead.