November 2010 Regional Sales and Price Activity*
Regional and Condo Sales Data Not Seasonally Adjusted

* Based on closed escrow sales of single family, detached homes only (no condos).  Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home.  Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.

sf = single family, detached home

Source:  CALIFORNIA ASSOCIATION OF REALTORS®

Median Price by Region

Fast Facts 
Calif. median home price: November 2010: $296,820 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region November 2010: Santa Barbara So. Coast $874,500 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 2010: High Desert $124,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third quarter 2010: 64 percent (Source: C.A.R.)
Mortgage rates: Week ending 1/6/2011 30-yr. fixed: 4.77 Fees/points: 0.8% 15-yr. fixed: 4.13% Fees/points: 0.8% 1-yr. adjustable: 3.24% Fees/points: 0.6% (Source: Freddie Mac)

States With the Longest Foreclosure Processes
Once a home owner falls into foreclosure, the eviction doesn’t happen right away — in fact, it may take years before delinquent borrowers finally have to turn over their keys.

Data by LPS Applied Analytics shows that New York holds the longest average in the nation–mortgage loans in the foreclosure process in New York have been delinquent for 600 days on average.

Loans in foreclosure in Florida, New Jersey, Hawaii, and Maine have been delinquent for an average of more than 500 days. Close behind, California and Nevada’s home loans have been delinquent for 461 and 427 days.

Meanwhile, Nebraska and Wyoming were found to be the two speediest states — loans in the foreclosure process are delinquent by an average of 358 states.

What’s causing the long wait? Some states that use a judicial process have backlogged courts. Florida, which has some of the highest numbers of foreclosures in the country, has had to set up separate courts and bring in retired judges to help handle the skyrocketing foreclosure cases.

Government officials and agencies also cause foreclosure delays through temporary moratoriums, mandatory mediation sessions, and loan modification or assistance programs, experts say.

Plus, mortgage servicers may even cause delays, not wanting to take on the legal and financial responsibilities of owning any more homes.

“Foreclosure typically isn’t making a profit, it’s minimizing a loss,” says Rick Sharga, senior vice president at Realty Trac. “It’s hard to get the (investors) who own the notes excited about spending more money to execute a foreclosure. Ironically, the longer these things take, the more it costs.”

• As the new year gets underway, there are four housing issues consumers should keep a close eye on: Jobs, foreclosure delays, Washington, and lending standards and rates.

• Jobs: If the job market improves, the demand for housing picks up, and many other challenges facing the housing market can more easily take care of themselves.  However, if it doesn’t, home prices will decline further, and more homeowners will fall underwater.

• Foreclosure delays: In September 2010, some of the nation’s largest lenders suspended foreclosures due to potentially fraudulent document-handling procedures.  Regulators and state prosecutors have launched a series of reviews, and investigations could shed more light on abuses, such as misapplied or excessive fees by servicers, their attorneys, or other third-party vendors.  If foreclosures are more difficult and expensive to process, banks and investors could step up bulk sales of loans or foreclosure alternatives such as short sales.

• Washington: This month, the Obama administration is set to issue an initial set of recommendations for how to remake Fannie Mae, Freddie Mac, and the broader mortgage market.  Meanwhile, regulators also are writing new rules on provisions outlined in the Dodd-Frank Act that will clarify how banks must retain some of the risk on loans that are bundled and sold off as securities and define what constitutes a “qualified residential mortgage” that is exempt from such rules.

• Lending standards and rates:  The government continues to dominate the mortgage-lending landscape, with more than nine in 10 new loans backed by Fannie Mae, Freddie Mac, or government agencies such as the Federal Housing Administration.  While some analysts have raised red flags over the FHA’s finances and say that loans with 3.5 percent down payments are leading the agency to take on too much risk, others worry about tighter lending standards that could further pinch demand.

When will housing come back in California? Five experts offer their views
Although the steep decline of home prices in California ended in spring 2009, the weakness in the housing market after the expiration of federal tax credits for home buyers last year has led to some speculation as to whether the recovery is sustainable.  Five experts, including Leslie Appleton-Young, the chief economist for the CALIFORNIA ASSOCIATION OF REALTORS®, were asked to provide their view on the state of real estate and what they think is needed to get the housing market moving again.

MAKING SENSE OF THE STORY FOR CONSUMERS

• In terms of home prices, the experts differed slightly with the majority predicting that home prices will remain flat throughout 2011.  Ms. Appleton-Young predicts home prices will rise 2 percent this year, while a foreclosure expert predicts housing prices to decline 5 percent in 2011.

• According to Ms. Appleton-Young, there is little chance of home prices returning to their previous peak levels anytime soon.  “We are in a slow-moving recovery with prices stabilized at the moderate and low end,” she said.  “We are still seeing price attrition and price softening at the upper ends of the market.”

• California’s recovery will hinge on location, according to Richard Green, director of the USC Lusk Center for Real Estate.  Areas between El Centro and Sacramento likely will not see a return to peak prices for a long time.  However, places like La Jolla, Laguna, Huntington Beach, Atherton, Palo Alto, the city of San Francisco, and Marin County could experience a return to their peak prices within the next five years, according to Mr. Green.

• Foreclosure expert Bruce Norris of the Norris Group believes the market is being artificially boosted by government programs and is set to fall further this year.  Mr. Norris believes the demand for housing is most-needed for a sustainable recovery.

• California’s coastal markets will make a return once the job market improves, according to Emile Haddad, chief executive at FivePoint Communities Inc.  In turn, that will lift consumer confidence.  However, California’s inland areas are more likely to lag behind, and builders will have to reconsider the kind of product they offer in certain places.

One of the best reasons to own a home is the deduction of the mortgage interest on your annual taxes.

Daily Real Estate News  |  January 3, 2011  |   Share

Could Rising Mortgage Rates Spur Housing Rush?
Mortgage rates have been rising ever since November 2010, when lows of 4.42 percent were reported. Bankrate.com recently reported a rise to 5.02 percent in 30-year fixed rate loans, which is the second time in three weeks rates have crossed the 5 percent mark–many experts say signaling the end to the 4 percent mortgage rate era.

Forecasters predict mortgage rates to hover in the 5-6 percent range in 2011.

Yet, some industry experts say the rise in mortgage rates may stimulate a sluggish housing market.

The rising rates create an urgency for potential buyers. They’ll have more incentive to buy soon before mortgage rates go any higher.

After all, higher interest rates mean buyers will pay more for their mortgages. Greg McBride, chief economist at Bankrate.com, told CNNMoney.com that when rates rise 4.25 percent to 5 percent, it takes away 9 percent of the purchasing power of buyers.

Lawrence Yun, chief economist of the National Association of REALTORS®, doesn’t foresee a moderate hike in mortgage rates as a negative for the industry. Instead, he says the real mortgage challenge is getting lenders to approve creditworthy buyers for a loan.

“It’s less about rates than it is about underwriting standards … If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy,” Yun said.

Washington, DC, December 30, 2010

Pending home sales rose again in November, with the broad trend over the past five months indicating a gradual recovery into 2011, according to the National Association of REALTORS®.

“All the indicator trends are pointing to a gradual housing recovery,” Yun said. “Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers.”

Existing-home sales are projected to rise about 8 percent to 5.2 million in 2011 from 4.8 million in 2010, with an additional gain of 4 percent in 2012. The median existing-home price could rise 0.6 percent to $173,700 in 2011 from $172,700 in 2010, which was essentially unchanged from 2009.

“As we gradually work off the excess housing inventory, supply levels will eventually come more in-line with historic averages, and could allow home prices to rise modestly in the range of 2 to 3 percent in 2012,” Yun said.

New-home sales are estimated to rise 24 percent to 392,000 in 2011, but would remain well below historic averages, while housing starts are forecast to rise 21 percent to 716,000.

Yun sees Gross Domestic Product growing 2.5 percent in 2011, and the Consumer Price Index rising 2.3 percent.

Median Price by Region

November 2010 Regional Sales and Price Activity*
Regional and Condo Sales Data Not Seasonally Adjusted

* Based on closed escrow sales of single family, detached homes only (no condos).  Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home.  Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.

sf = single family, detached home

Source:  CALIFORNIA ASSOCIATION OF REALTORS®

Median Price by Region