Archive for the ‘Economics’ Category

California tends to lead the Nation in many ways – lately we are near the top as it applies to unemployment.  Unemployment went from 6.8% in May 2008 to 11.5% in May 2009.  The only states / areas with higher unemployment according to the Bureau of Labor Statistices are:

Puerto Rico at 14.4%

Michigan at 14.1%

Oregon at 12.4% Read the rest of this entry »

Affordability, Foreclosures, Inventory and Unemployment 5/20/2009

First Chart is showing what percentage of a population can afford the median priced home, in its area – for Riverside / San Bernardino Counties the lowest percent of families that could afford the median priced home was in the third quarter of 2006 at 18% – now in the first quarter of 2009 it is 65% of families that can afford the median priced home, which is superior to the National affordability rate of 64% for the first quarter of 2009.

affordability Read the rest of this entry »

March 2009 Moreno Valley Real Estate Prices down to January 2001 levels. Read the rest of this entry »

The National unemployment rate for Feb 2009 hit 8.1% – that is a significant increase from the Feb 2008’s 6.2. California hit 10.1% in January 2009 – again a big increase over the Jan 2008’s 6.1%.
Riverside – San Bernardino – Ontario (California) had an unemployment rate of 10.1% in December 2008 another big increase over the 6.5% from December 2007. Read the rest of this entry »

Bayer Facts: April 30, 2008

First chart is Moreno Valley median sales prices from DataQuick for March, June, September and December from the year 2000 to 2008 (March) – showing the rapid increase in median prices and the current decline. Prices have gone down in 1-year by zip code: 92551: 35.5% 92553: 49.3% 92555:  37.4% 92557:  36.8%

Next chart is the total number of home sales for March 2000 to March 2008 – showing the rise and decline in the number of sales.

DataQuick reports for all of California March 2008 reported the lowest number of home sales for a March since they started keeping records in 1988.  And 38.4% of the homes sold in the State in March were foreclosed homes.

1

2

Next chart is the number of foreclosures for each of the Moreno Valley zip codes for the first quarter of 2007 and the first quarter of 2008 – showing the huge jump up.

3

For the first quarter of 2008 – Stockton, California had the highest rate of homes in the foreclosure process at 1 house out of 30 – in second place is Riverside / San Bernardino Counties – with 1 house out of 38 affected.  For the 4 zip codes in Moreno Valley here is the following:

Zip code 92551 1 house out of 43 is in foreclosure – ranking 11 in the Southern California area

Zip code 92553 1 house out of 69 is in foreclosure – ranking 25 in the Southern California area

Zip code 92555 1 house out of 36 is in foreclosure – ranking 7 in the Southern California area

Zip code 92557 1 house out of 75 is in foreclosure – ranking 30 in the Southern California area

And there are 498 zip codes in the sample

This chart is for a 3 week period of single family homes in Moreno Valley by Notices of Default (the first step in the foreclosure process); number of new listings and the number of those new listings that are vacant; the number of pending sales and the number of those pending sales that were vacant; and the number of closed sales and the number of those that sold vacant.  43% of the new listings are priced under: $200,000.  The average list price of the pending sales was: $215,163 and the average price of the sold homes was: $233,896.  With the average home sold over 1900 square feet in size.

4

Final chart is the median price per square foot for the closed sales / closed sales (vacant) / list prices of the pending sales and list prices of the pending sales the sold vacant.  Noting the pending are going out for less and there is a slight discount between prices of occupied homes and vacant homes.

5

Until we see more sales then new listings and new notices of default – and more pending sales actually closing escrow – prices will not be able to start moving upward.  And the bigger the desperation of the sellers will probably result in a continued decline in home prices.  Prices now are down to the levels from the summer of 2003, and a decline of about 47% from the top of the market from the Summer of 2006.

From Beverly A. Bayer, SRA

Moreno Valley, California Market Data: 3/18/2008

The following is the average sales prices per square foot of Moreno Valley, CA homes by house size groups: 1000 – 1200;  1400 – 1600;  and  1800 – 2000 square feet; starting with the average sales price per square foot from 1.5 years ago / 1 year ago / 6 months ago and current pending sales – using their last list prices.  (data date: 3/18/2008).

1
According to DataQuick home prices in the 4 Moreno Valley zip codes have gone down between February 2007 and February 2008

92551 down 36.3%
92553 down 42.9%
92555 down 30.0%
92557 down 35.2%

With 130 total home sales – in Feb 2007 174 homes sold – in Feb 2006 309 homes sold – and in Feb 2005 285 homes sold – showing the current slow rate of home sales.

Based on the rate of sales home between 1000 – 1200 square feet in size – it would take 13.6 months to dispose of the standing inventory.

For homes between 1400 – 1600 it would take 15 months to dispose of the standing inventory.

For homes between 1800 and 2000 square feet – it would take 19+ months.

From Beverly A. Bayer, SRA appraiser

Foreclosures, Affordability and Financing

Bayer Facts of Moreno Valley, CA: 3/5/2008

Moreno Valley Foreclosures

Notices of Default reported: 2/5/2008 70
2/12/2008 63
2/20/2008 56
2/26/2008 127
3/4/2008 101

= about 333 NODs per month – and for February 2008 about 108 homes are reported as sold in MLS (some by the auto close option).  There are 380 properties in Moreno Valley listed as pending in MLS – 244 pending since: 2/5/2008.  So even if each pending over the past month sold – there are more new Notices of Default.

Affordability

On 2/19/2008 C.A.R. reported the entry level affordability in California reached 33%, in the 4th quarter of 2007.  Which is the percentage of homebuyers can afford an entry level home. The calculation of mortgage payment is based on an interest rate of 6.21% with a 10% down payment.
The improvement was from 1 in 4 families that could afford the statewide entry-level home in the 4th quarter of 2006 to 1 in 3 families in the 4th quarter of 2007.

For Riverside / San Bernardino the affordability rate for the current period is 46% (almost ½) compared to 34% (about 1 family out of 3) 1 year ago.  For Riverside / San Bernardino the entry-level home price for the 4th quarter of 2007 was: $287,330 (basically 85% of the median home price per area) – with an estimated monthly mortgage payment with taxes and insurance at: $1920 and a qualifying income of: $57,600 (30%).

1

Financing

We at Bayer Appraisals have been surveying listings reported as sold by “auto sale” in MLS and finding the following:  7 out of 15 properties (we called about) reported as “closed” had not, due to the auto closing feature now part of our MLS.  Agents when asked did not like the new feature and sometimes did not know their pending sales were coming up as “closed”.   All together 10 agents were kind enough to talk about what they are seeing now.  They are seeing more activity and reported multiple offers – generally on the lower priced homes – typically on properties in move in condition.

FHA financing is hot in the around $200,000 price range and below; with down payment assistance common.  Tighter underwriting is a problem, often with last minute demands (such as larger down payments) extending the escrow times, or killing deals.  Some agents report an increase in desk reviews.  One agent had a problem where a desk review came in lower then the appraised value / purchase price.  100% financing is basically gone, and even 5% down might not be enough, for conventional loans.  Agents expressed a belief that foreclosures will remain a problem and prices will continue downward.

Hot news from Wil at MTGexperts.com – the new Fannie Mae / Freddie Mac – conforming loan limit is now: $500,000 in Riverside / San Bernardino Counties.

Recent Moreno Valley home sales: 2/22/2008
Not taken originally from MLS

So what am I seeing:  mostly REO sales; more FHA financing, no longer 100% financing which was the norm 2 years ago.  Big losses of value.  The lowest sales price of these recent sales is $150,000 – but there are currently 26 pending sales where the house was listed below $150,000.  And 45 single family homes now listed at $150,000 or less – with an average house size of: 1012 square feet (average at $140 per square foot).  In the most recent week of Moreno Valley Notices of Default – there were 56 homes; which is about average.  Compared to about 2 weeks of sales (above) that is a ratio of / about: 6 NODs for every house sold.

$150,000 REO 2/6/2008 95% conv 1149Sqft $130.55 per Sqft
$235,000 6/2004
lost $85,000 in 44 months = – $1932 per month
$175,000 REO 2/14/2008 80% conv 852Sqft $205.40 per Sqft
$244,000 3/2005
lost $69,000 in 34 months = – $2029 per month
$189,000 REO 2/7/2008 95% conv 1422Sqft $132.91 per Sqft
$350,000 6/1/2006
lost $161,000 in 20 month = – $8050 per month
$190,500 REO 2/11/2008 98.6 FHA 1526Sqft $124.84 per Sqft
$270,000 8/1/2004
lost $79,500 in 42 months = – $1893 per month
$200,000 REO 2/5/2008 98.4% FHA 1335Sqft $149.81 per Sqft
$107,000 8/1/2000
$215,000 REO 2/1/2008 CASH 1868Sqft $115.10 per Sqft
$379,000 3/1/2006
lost $164,000 in 23 months = – $7130 per month
$234,000 REO 2/13/2008 90% conv 960Sqft $243.75 per Sqft
$315,000 3/1/2006
lost $81,000 in 23 months = – $3522 per month
$235,000 REO 2/8/2008 CASH 1571Sqft $149.59 per Sqft
$309,000 1/1/2005
lost $74,000 in 37 months = – $2000 per month
$270,000 2/1/2008 94% FHA 1623Sqft $166.36 per Sqft
Not an REO or a short sale
$290,000 REO 2/1/2008 98.4% FHA 1821Sqft $159.25 per Sqft
$152,000 8/1/2001
$293,000 REO 2/5/2008 90% conv 2141Sqft $136.85 per Sqft
$300,000 2/8/2008 100% VA 1743Sqft $172.12 per Sqft
$221,000 10/1/2003
$300,000 REO 2/5/2008 67% conv 1988Sqft $150.91 per Sqft
$465,000 3/1/2006
lost $165,000 in 23 months = – $7174 per month
$332,500 REO 2/8/2008 75% conv 1792Sqft $185.55 per Sqft
$460,000 7/1/2006
lost $127,500 in 19 months = – $6710 per month
$340,000 2/11/2008 90% conv 1865Sqft $182.31 per Sqft
Sold outside MLS: Buyer / Seller had the same last name
$352,000 2/5/2008 98.5% FHA 1885Sqft $186.74 per Sqft
$155,000 11/1/2002
Seller & listing agent had the same name – lowest list price $9000 below sales price
$360,000 REO 2/13/2008 80% conv 2778Sqft $129.59 per Sqft
$515,000 6/1/2006
lost $155,000 in 20 months = – $7750 per month
$387,500 REO 2/4/2008 80% conv 2580Sqft $150.19 per Sqft
$499,000 5/1/2005
lost $111,500 in 45 months = – $2478 per month

Moreno Valley Pending Home Sales Report: 2/21/2008

# of listings list price range Average house size
15 $99,900 – $140,000 1068
11 $140,001 – $150,000 1193
9 $150,001 – $160,000 1254
24 $160,001 – $170,000 1403
20 $170,001 – $180,000 1339
14 $180,001 – $190,000 1464
19 $190,001 – $200,000 1568
9 $200,001 – $210,000 1569
14 $210,001 – $220,000 1534
23 $220,001 – $230,000 1693
14 $230,001 – $240,000 1745
15 $240,001 – $250,000 1693
16 $250,001 – $260,000 2059
14 $260,001 – $270,000 2085
15 $270,001 – $280,000 2327
8 $280,001 – $290,000 2423
12 $291,001 – $300,000 2528
6 $300,001 – $310,000 2389
12 $310,001 – $320,000 2593
6 $320,001 – $330,000 2551
1 $330,001 – $340,000 2002
5 $340,001 – $350,000 2853
9 $350,001 – $360,000 3058
5 $360,001 – $370,000 2733
5 $370,001 – $380,000 3200
2 $380,001 – $390,000 3185
4 $390,001 – $400,000 3325
5 $400,001 – $425,000 3280
4 $425,001 – $450,000 3929
2 $450,001 – $500,000 3040
1 $500,001 – $550,000 5009

½ of the pending sales were listed below $235,000.

It’s a Tough Real Estate World

1-28-2008

Last night on 60 minutes there was a major segment on the sub-prime problem.  They talked to one couple who are having problems with their adjusting mortgage – their only option (they believe) is to walk away.  They were looking at Stockton, California as a foreclosure hotspot using: www.foreclosureradar.com.  I went to the site the Moreno Valley map is jam packed with pre-foreclosure, foreclosure and lender owned properties.  They are using www.zillow.com as the source for current values of the listed properties.  I have found zillow is not reporting the current (real) values in Moreno Valley.

Report from DataQuick (1-22-2008) found the number of mortgage defaults in California in the fourth quarter of 2007 was the highest in 15 years.  They reported the statewide median home price hit a high of $484,000 last March, going down to $402,000 at the end of the year.  Most of the loans in default originated in August to October 2006.  For Riverside County the default numbers were from 4528 in the 4th quarter of 2006 to 9913 in the 4th quarter of 2007.

A homeowner is suing her real estate agent for she believes the agent mislead her about the true value of the home she purchased.  The case goes to trial today in North San Diego County.  The agent claims the buyers did not do their due diligence, the buyers claimed they trusted the real estate agent – who not only sold them the house, but also worked as a loan broker.  Requests to see the appraisal were stalled, thus the appraiser was also sued, but settled.

On Friday 1/18/2007 a vice president of a collapsed subprime mortgage lender (Fieldstone Mortgage) jumped to his death, after apparently after killing his wife in a murder-suicide.