What's going into escrow - Irvine and maybe some Tustin too

NEW -> Contingent Buyer Assistance Program
<p>41 Stowe got a NOD, recorded on 2/7/08, entered on 2/22/08.</p>

<p>Looks like the 1st TD is at $1M. I can't see a 2nd on RealtyTrac. </p>
 
<p class="MsoNormal">Well, I’m glad there won’t be a bidding war on 41 Stowe between Ipop and myself when they drop the price. </p>

Ipop already stated his intentions on the main blog today, “No argument from me there… I hate corner locations.” Whew, now I just need to make sure that casita is large enough for my Solar Storm tanning bed.
 
<p>Aw ten, I doubt you'll have much competition from me. I can't see speding over a mil. Just can't do it psychologically even if somehow the long-term affordability is there. Presently, the most I'd offer on anything would be high $900s I think. Gotta try to stay around 4X... Tempting to stretch, must fight the urge. </p>
 
<p> </p>

<p>Ipop,</p>

<p>Yeah right, nice try though. Too bad I don’t believe you. Are you kidding me, if this baby drops near the $1M range, you’ll be all over it. So will I for that matter. </p>

<p />
 
From Lansner's blog - Must be the spring bounce:<p>


<i>"DataQuick?s freshest stats show this will certainly be the 29th straight month where buyers bought fewer O.C. homes than the year-ago period as mid-February O.C. home sales were off 49% from a year ago. If that pace for the 22 business days ended Feb. 13 holds for the full month, this month will mark the steepest year-over-year sales drop in DataQuick?s books that date to 1988."</i>
 
<p>Nah awgee, the spring bounce will show up in March and April sales stats, and maybe only show up in selected cities. February closes are December and January escrows. I don't think the Jan/early Feb improvement in prime mortgage rates is really going to do anything to subprime devastated Santa Ana and Garden Grove.</p>

<p>Wait until we get to the Fall when year-over-year Irvine sales figures are actually better. That'll really blow people's minds... </p>
 
<p>Hey awgee, did you see this bit on Lansner? </p>

<p><em>Steve Thomas at </em><a href="http://www.homesoc.com/"><strong><em>Re/Max Real Estate Services</em></strong></a><em> in Aliso Viejo in his latest biweekly market report notes: “Demand, the number of homes placed into escrow within the prior month, increased by 49% over the past month from 1,219 to 1,820 escrows. We have not seen demand at this level in six months, since just before the beginning of the credit crunch in mid-August. “</em></p>

<p><em>Thomas watches a “market time” benchmark that calculates how many months it theoretically takes to sell all the O.C. inventory in local brokers’ MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, it would take 8.46 months for buyers to gobble up all homes listed for sale last Thursday at the current pace of deals vs. 9.73 months two weeks earlier and vs. 4.59 months a year ago. Market time was 15.6 months at New Year’s.</em></p>

<p>Months inventory gone from 15.6 months to 8.46 in less than two months? Can anyone say Spring Bounce? Guess I'm not the only guy that thinks escrows and months inventory are a good leading indicators...</p>
 
<p>It's not becaue homes are selling.</p>

<p>It's because people are pulling homes waiting for the recovery.</p>

<p>There's more phantom inventory now than listed inventory if my neighborhood is any indication.</p>

<p>BTW, I don't think your experiment is useless. It's interesting, but far from actionable. The only thing that matters is COMPLETED BUSINESS, closed escrows. You can book all the deals in the world and it won't matter if they don't close.</p>
 
<i>"Guess I'm not the only guy that thinks escrows and months inventory are a good leading indicators..."</i><p>


What exactly are escrows and months inventory good leading indicators of?<p>


<i>"Months inventory gone from 15.6 months to 8.46 in less than two months?"</i><p>


Is this accurate?
 
Ipoplaya,





Do think there is even a snowball's chance in Hell prices will not decline further from this point? The macro trends and market conditions certainly do not favor the possibility of any meaningful price increases -- or any price increases for that matter.
 
<em>"Months inventory gone from 15.6 months to 8.46 in less than two months?"





</em>Is the number seasonal? It was less than 5 this time last year. Did prices go up in 2007? Will prices go up in 2008 if months of inventory is 70% higher than last year?
 
<em>A key reason behind the changes: the latest count of deals in escrow of 1,820 is up 82% vs. <strong>Jan. 19’s wintertime low</strong>. <strong>





</strong>Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports that the number of O.C. <strong>distressed properties for sale (homes listed by agents as foreclosures or short sales) was 4,859 last week, up 422 vs. two weeks earlier or a +9.5% change. As a percent of all listed homes for sale, distressed properties were 31.6% of the market last week vs. 29.1% two weeks earlier. Since Dec. 27, the number of distressed homes on the market has grown 1,108 while the “non-distressed” supply is 1,231 lower.





</strong></em>Okay... so since the end of December, there have been 1108 distressed homes added to the market, but in the last <strong>two weeks 422</strong> distressed homes have been added. Now a little basic math here, more NODs = more foreclosures, and more foreclosures = more inventory. What happens when there are more distressed properties added to the market than non-distressed properties are taken off? Or, how about when distressed properties account for 50% of the inventory?





Anyone want to bet that the foreclosure numbers for February are going to be better than last month, on a per day basis?
 
<p>Oh they'll decline IR. Mostly just having fun with awgee. He likes to pick at my stuff and toss out Lansner bits here and there. Amazingly, the non-bearish stuff never gets posted around here. Just trying to keep it real...</p>

<p>When I started tracking escrows, the uber bear clan around here said that escrows don't mean squat, they'll never close, won't get through underwriting, etc. No_Vas just essentially just said the same thing. The data in my albeit tiny Irvine sample would seem to suggest otherwise. Looks like a close rate of over 90% to me... Heck, at a number that high, you can pretty much equate getting into escrow with a closing a deal.</p>

<p>"Is the number seasonal? It was less than 5 this time last year. Did prices go up in 2007? Will prices go up in 2008 if months of inventory is 70% higher than last year?</p>

<p>If you believe in Case-Shiller bigmoney, when it was 5 this time last year, prices were moving down but pretty slowly compared to the real declines at the end of the year. The early 2007 declines were on the order of .5% per month. When the months inventory number was lower, during the 1st half of 2007, prices went down by around 2.5% over the first six months of the year. When inventory spiked relative to sales in August, that's when the big price declines kicked in - 9.6% over the last five months of 2007. </p>

<p>If Irvine inventory gets down to 5-6 months worth, and we don't appear to be that far off for whatever reason, the pace of price declines will slow dramatically. Hopefully No_Vas is right about that phantom inventory and it starts hitting the market when the evidence of this little bounce starts getting some attention. 20-30% declines will take a mighty long time to achieve at .5% per month... </p>

<p> </p>
 
<p>Just saw a close price on a Northpark Square REO I was tracking... Sold for $810K. It's one of those the 3-story Cal Pac units, featured on IHB:</p>

<p><a href="http://www.irvinehousingblog.com/2007/09/19/catch-a-wave/">http://www.irvinehousingblog.com/2007/09/19/catch-a-wave/</a></p>

<p>and like this one:</p>

<p><a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1362608">http://www.redfin.com/stingray/do/printable-listing?listing-id=1362608</a></p>

<p>Looks like Wells got their bid amount back...</p>
 
<p>We've even-Steven now Ten. Parma closed, very quickly I might add, for $859K. I was at $860-865K, you were at $845K. I wish everything else was $277 per sf.</p>

<p><a href="http://www.ipoplaya.com">www.ipoplaya.com</a></p>
 
It is difficult, this waiting game, as the prices just haven't been dropping as quickly as I had hoped. The MF's in Woodbury are interesting, but really am hoping for pricing more in the 1.2M range rather than 1.4M. Wife doesn't want to put our current home up for sale until we've seen a home we really like in a price range I feel won't cause use to lose more than another 10% in equity.
 
<p>Irvine might corrlate w/ 90% of the escrows closing, but the rest of the county certainly doesn't. </p>

<p>During the bubble homes that entered escrow almost always closed, so I think what you're trying to do would be actionable then.</p>

<p>I just can't guarentee it will be going into the future - and I don't understand why you'd care when you can just track closes and they (should) mirror escrows in a functional market.</p>
 
<i>"Oh they'll decline IR. Mostly just having fun with awgee. He likes to pick at my stuff and toss out Lansner bits here and there. Amazingly, the non-bearish stuff never gets posted around here. Just trying to keep it real..."</i><p>

Real? How come you do not answer my questions? I will repeat them here.<p>

<i>"Guess I'm not the only guy that thinks escrows and months inventory are a good leading indicators..."</i><p>

What exactly are escrows and months inventory good leading indicators of?<p>

<i>"Months inventory gone from 15.6 months to 8.46 in less than two months?"</i><p>

Is this accurate?<p>

Please notice, I am not tossing out Lansner bits. I am tossing out Ipop bits and just asking for some clarification.
 
<p>Awgee:</p>

<p>Sales and short-term home price movements.</p>

<p>No idea. You'd have to ask Lansner or the guy he is quoting/summarizing, Steve Thomas I believe it is. It's not my stat, I just picked it up.</p>
 
<p>Yeah, but why not just wait 30 days and see what closed escrow where you have a hard number to hang it on?</p>

<p>This is like a twisted game of "Accounts Recivable Realization" mixed with that Enron style "mark to market".</p>
 
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