February 2010 Stockton Area Housing Market Update
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Foreclosure Activity In California Is Up
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As reported at DSNews.com, ForeclosureRadar, a locally based company that tracks every California foreclosure on a daily average basis, reports foreclosure activity here increased last month. The number of foreclosures that went back to the bank rose 29.4 percent, those sold to a third party rose by 62.7 percent, and cancellations were up 20.8 percent. Only a small percentage reach the end of the process… Last month, 21 percent of scheduled sales were fulfilled, compared to 31 percent a year earlier indicating a smaller percentage of foreclosures scheduled for sale completed the process. The total number of properties in the foreclosure process remains near record levels in California, despite declines in default filings. ForeclosureRadar says this is largely due to the increase in the time it is taking banks to foreclose, suffering prolonged delays in execution. The time to foreclose stretches… The time from notice of default to trustee sale has increased from 146 days in August 2008, to 229 days in January 2010. Lenders, under increasing governmental pressures, have increasingly pursued alternative measures such as short sales, loan modifications and other foreclosure alternatives. “With delinquent payments rising, foreclosures slowing, and foreclosure alternatives failing,” said Sean O’Toole, founder and CEO of ForeclosureRadar, “it appears the foreclosure crisis will be with us for many years to come.” What’s ahead??? What to do??? If you have to sell your home do it sooner rather than later. There will be increasingly challenging times. According to Real Capital Analytics: · As of January 2010 there is more than $174 billion of U.S. real estate in distress. · $136 billion (nearly 80%) of this number consists of “troubled assets” - where mortgages are delinquent or in default or liens have been filed or… · Restructured and modified loans account for another $14 billion of distressed assets. · Only $17 billion of distressed real estate has been resolved to date. · There is approximately $1.5 trillion worth of commercial mortgages coming due before 2013. Problems are far from over - alternatives such as short sales may be an answer… Pat Holkesvig, President of Homes In Stockton, Inc. states unequivocally that the foreclosure crisis WILL be with us for many years. “We constantly seek alternatives find alternatives to foreclosure. Several months ago we started assisting homeowners in distress by pursiuing the short sales process. By the end of the year we handled more short sale transactions than any other agent in San Joaquin County. Some banks welcome this alternative, especially those who realize that it is more profitable for them since net foreclosure proceeds are typically 30% less than net short sales proceeds. The process also helps preserve the dignity of borrowers. Short sales nevertheless take longer than 120 days due to banks’ apparent inability to move fast. Although we close over 90% of these listings, much can happen in that much time.” In September’s newsletter we discussed the short sale process. Click here to read that newsletter. |
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(Links are available at the bottom of this email to detailed market reports for Brookside, Lincoln Village, Lincoln Village West, Morada, Morada West, Quail Lakes, Spanos East and Spanos West.) |
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Stockton Market Trend: Increased delinquencies, current foreclosures, and upcoming problems related to Option ARMs should result in a housing inventory increase and reduced lending ability - and continued home price reductions. Traditional laws of supply and demand dictate this will happen, unless there is massive finance industry (bank and governmental) interference.
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Stockton Stats for January 2010 |
| · There were 2,018 homes for sale in Stockton at the end of the month. This total includes 711 pending units, leaving a balance of 1,307 units (2.6 months’ inventory) available for sale.· 6,004 homes were sold in Stockton during the 12 month period ended January 2010, an average of 500 homes per month. This compares to 495 units average per month one year ago.
· 1,672 homes sold in the last 4 months, compared to 2,359 units sold in the same period last year. SALES ARE SLOWING… · There is a 4 month inventory on the market (see the “Months Sales In Inventory” chart above). Exclusive of pending sales (more transactions fall out of escrow in this market than in a normal market) there is a 2.6 month adjusted inventory. · There should be a rash of new homes that will be placed on the market over the next few months unless lenders “bank” foreclosed-upon homes, or some other solution is found for ‘warehoused’ foreclosures and other “Shadow Inventory”. Click here for our comments on Shadow Inventories in October. · 369 units were sold this month. · The average sales price per square foot is $82 - less than the cost to build a home. · The average home sales price was $144,000. · Increasing delinquencies will result in new measures and should continue a downward pressure on Stockton home prices. |
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Click on any of the following links to view neighborhood specific market reports. |
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Pat Holkesvig and Your Home Team are now affiliated with Werner Properties Inc. Please visit us at our new office located at 3439 Brookside Rd, Suite 204, Stockton, CA 95219. If you are thinking about selling your home, call your neighborhood experts at Homes In Stockton - Your Home Team. We understand the market and have the knowledge and experience to guide you through the complexities of today’s real estate transactions. We have more short-sales transactions than any other agent in San Joaquin County. We close over 90% of our short-sales. If you would like to discuss this process as an option for yourself or for someone you know please call us. Call us today at 209-471-6516 209-471-6516 209-471-6516 209-471-6516 . Referral Request: Please forward this newsletter to anyone you know with a need for information on short sales, loan modifications or real estate financing!
Click here to visit Foreclosures-In-Stockton.com - our free auction, pre-foreclosure, and foreclosure search!
Pat Holkesvig & Your Home Team Homes In Stockton, Inc./Werner Properties Inc.
DRE #01393419 Homes-In-Stockton.com |
Foreclosure Activity in California is Up Again as Stalemate Continues
With hundreds of thousands of California homeowners in foreclosure, a stalemate continues as only a small percentage reach the end of the process through cancellation or sale, and the time to foreclose stretches.
Once again the raw numbers fail to tell the full story due to the difference in the number of business days in January versus December, according to ForeclosureRadar, a locally based company that tracks every California foreclosure. The real truth lies in the fact that on a daily average basis, foreclosure activity in the Golden State increased last month on all fronts, the company said.
After significant declines in December, foreclosure filings were slightly lower overall in January. But with only 19 days that notices could be recorded last month, compared to 22 in December, foreclosure notice filings actually increased on a daily average basis with notices of default jumping 9.5 percent and notices of trustee sale up 10.3 percent.
Foreclosure outcomes also dramatically reversed course from the prior month, ForeclosureRadar said. Looking at the daily averages, the number of foreclosures that went back to the bank rose 29.4 percent, those sold to a third party rose by 62.7 percent, and cancellations were up 20.8 percent.
We expct the number of Stockton foreclosures and Stockton short sales to increase this year.
Banks Plan to Clear Books By Turning To Short Sales
Now short sales are growing at a faster rate than foreclosures and most economists expect the distressed home market to have a 5% increase in the number of short sales this coming year. That expectation combined with the fact that banks generally lose 20% more on a foreclosure than a short sale make it no surprise that banks such as Bank of America, Wells Fargo, JPMorgan Chase and Citigroup are scrambling to accommodate this inevitable shift in the market. Read more here US banks take hit to clear home loan books.
Housing Market Turnaround Up To Banks
People are buying up short sales and foreclosures at the expense of conventional sales and if the housing market is ever going to recover, the banks need to get short sales closed at a much quicker pace. The average short sale length in some communities has increased to 298 days and even up to a year in some cases. These long turnaround times discourage many potential short sale buyers as they turn to cheaper and quicker foreclosure options. These homes lingering as pending short sales in addition to the new short sales flooding the market has created a two-year supply of short sales on the market. At that rate, the first possible opportunity to see a market recovery wouldn’t be until 2012. However, if banks could improve the short sale approval times, much of that inventory would disappear. It seems like this would be simple and banks would be working toward this goal. Instead the banks are concentrating on foreclosures and selling them at much bigger discounts, devaluing properties across the board. It is no wonder realtors would rather wait for a property to foreclose reducing cost and closing time. So whether we like it or not, the banks are in control of the market and unless their actions change to improve the short sale procedures and stabilize the market, it will be a while before things recover.
Banks Have No Control Over Collections Process
Having wored on numerous short sales, I have often wondered about the banks’ apparent lack of control over collection policies. This is especially true if the loan is a subordinate lien. The demands made of the sellers by these second liens are far beyond reasonable, even more so if the subordinate lien has already been charged off. Once a third party company takes over a loan, the treatment of the seller and the short sale process in general is horrific. Then it becomes magnified, because the third party company blames the bank for the ‘required’ unreasonable demands but the bank will say they no longer have any interest or authority over the file. So if neither company will claim a primary interest in the file, then who is responsible for all the required demands on the seller? Clearly somebody has an interest in the file. As awful as all of this may be, the following story Bank Screws Even Ex-Employees Of 21 Years On Mortgages reveals not only how heartless banks can be but also the lack of control over the collections process in general.
Foreclosure Numbers Down, But For How Long?
According to the February 15th story in Property Wire US property foreclosure figures easing, defaults are down 12% from December but stayed 4% above levels in January 2009. Foreclosures are down 11% from December and remained 15% above levels in January 2009. However if the market does what we expect and stays consistent with the 2009 patterns, there will be a surge in foreclosure numbers this coming spring. This is disappointing especially with the knowledge that repeating the 2009 pattern doesn’t include the sudden flood of the Alt-A and option ARM loans previously predicted for this coming summer.
Making Home Affordable Program Fails - Long-term Problem, Short-term fix
Housing advocates and politicians are pressuring the administration to make changes to the Making Home Affordable program as the housing crisis continues to grow. The suggestions to retool the program are justified. A few facts follow:
· Less than 200,000 homes owners have received permanent loan modifications even though it is estimated 3 to 4 million are eligible.
· 600,000 of the eligible borrows cannot apply because the companies servicing their loans are not participating in the Making Home Affordable Program.
· Approximately 1,000,000 home owners received temporary modification but less than ¼ have yet to be made permanent.
· Majority of homeowners obtaining loan mods have done so because of job loss or income reduction.
· 25% of borrower receiving relief end up missing payments again.
· 60,000+ of the borrows receiving modification have defaulted.
TransUnion Reports Mortgage Delinquencies Increase 50% Compared to Last Year!
The percentage of borrowers at least 60 days past due on their mortgage increased for the 12th straight quarter, hitting 6.89 percent by the end of 2009, according to new data released by TransUnion Tuesday. That%u2019s an all-time high in the credit bureau%u2019s study, dating back to 1992.
This statistic, which is traditionally seen as a precursor to foreclosure, increased 10.24 percent from the previous quarter%u2019s 6.25 percent average. Compared to the year-ago delinquency rate of 4.58 percent, past due mortgages are up a staggering 50 percent, TransUnion said.
The Chicago-based company called the recent slowing in the pace delinquency increases %u201Cshort-lived.%u201D What was starting to become a trend came to an abrupt end in the fourth quarter, when the mortgage delinquency rate accelerated instead of decelerated as it had done since the beginning of 2009.
Based on TransUnion%u2019s analysis, borrower delinquency rates last quarter continued to be highest in Nevada (16.19 percent) and Florida (14.93 percent). North Dakota (1.84 percent), South Dakota (2.46 percent), and Alaska (2.84 percent) continued to produce the nation%u2019s lowest mortgage delinquency rates.
Stockton foreclosures are going to be around for awhile. We continue to receive a large number of calls from home owners interested in pursing Stockton short sales.
Sac Bee Exclusive: Region’s shuttered stores tell a thousand stories
An empty shell occupies 9,500 addresses across the Sacramento region %u2013 one closed business for every six still open, according to a Bee analysis of U.S. Postal Service data.
That’s more dormant businesses than in 17 entire states, including Utah, Arkansas and New Mexico.
You can see it on Madison Avenue in Fair Oaks, where Mike Castagnola is liquidating his party supply store, counting down the final days on a business with a 30-year run.
It’s just as apparent on Lake Tahoe Boulevard, the main strip cutting through South Lake Tahoe, where James Dalton counts five vacant businesses within sight of his antiques shop %u2013 and plans to add his store to that number.
And it’s vivid along Main Street in Woodland, where Jill Caunedo happily ran a bagel and coffee shop %u2013 until about two weeks ago.
“Thirty percent of all the businesses (on Main Street) are vacant,” Caunedo said, adding that she is left to sell her former cafe’s equipment for a quarter on the dollar.
A glut of empty businesses means less sales tax revenue for the four-county region, fewer jobs, fewer shopping options, less commercial construction, plenty of thwarted dreams.
It also makes for depressing scenes during the morning commute: the empty Hollywood Video, for instance, near Folsom Boulevard and Howe Avenue, with its large red sign fruitlessly offering “New DVDs for Sale“; the health store just down the road surrounded by vacant storefronts and halfheartedly removed gang graffiti.
No California county has a higher proportion of shuttered businesses than Sacramento, according to the data. Placer County ranks third.
As of September, the number of dormant addresses in Sacramento, Yolo, Placer and El Dorado counties had jumped more than 50 percent during the recession, according to the postal service data, which logs formerly occupied commercial addresses %u2013 office and retail %u2013 where mail has not been picked up for more than 90 days.
There is some hope. Besides a nebulous optimism that the economy may have bottomed out, commercial rents have fallen sharply as supply exceeds demand. Entrepreneurs with cash can get a deal and jump-start a new business.
But cautious and troubled banks aren’t granting many loans to launch enterprises. Many businesses and offices are stuck with rents they can’t afford, while relocation costs keep them from moving. And consumers and companies have changed their spending patterns, growing accustomed to smaller offices and brown-bag lunches.
“Retail’s pretty much been the hardest hit,” said Garrick Brown, research director for the Sacramento office of real estate firm Colliers International. “The pool of new businesses is gone %u2026 and small business lending has fallen off the cliff.”
Collateral damage
Behind all of these vacant businesses are thousands of small, personal decisions, most of them justifiable %u2013 even necessary %u2013 in a sour economy.
In Woodland, for instance, “People just gave up their once-a-week coffee,” said Caunedo, the entrepreneur who ran Bagel City until its recent closing.
Besides selling coffee and bagels from her Main Street shop, Caunedo relied heavily on catering. Her biggest customers were the city of Woodland, the local school district and nearby University of California, Davis.
Each of those public institutions shut the spigot amid budget woes. Caunedo doesn’t blame them: How can you justify serving quality bagels, for instance, at a meeting about whether to lay off teachers?
“In January 2008, all the catering just came to a screeching halt,” Caunedo said.
So Caunedo started laying off workers herself, going from seven to two. Many of her neighbors succumbed alongside her.
Just down the street from Caunedo’s cafe is the center of downtown Woodland, a quaint jewel of the Sacramento region, walkable and charming. But the shops there tend to sell art and antiques, not diapers and medicine, so the recession hit them hard. On just a half block of Main Street, for example, the body count of empty addresses is daunting %u2013 Nos. 503, 505, 507, 509, 511, 514, 516, 517, 518, 519, 535, all vacant.
? Copyright The Sacramento Bee. All rights reserved.
Call The Bee’s Phillip Reese, (916) 321-1137.
The commercial real estate market will provide the next wave of foreclosures. Check out the Sacramento Bee story.
Posted via web from www.Homes-In-Stockton.com Posterous
CA Foreclosure Law - Civil Code 2924
We process more Stockton short sales than any other short sale agent in the Central Valley. We receive numerous requests for information on the California foreclosure process. A copy of CA Foreclosure Law - Civil Code 2924 follows. Please call or email us if you are interested in buying or selling a Stockton short sale. You can view all the Stockton homes for sale at www.homes-in-stockton.com.
