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

NEW -> Contingent Buyer Assistance Program
Agreed,



TR could probably sustain a premium but prices will not be able to hold up. Everyone will do relative value and determine if an extra 10 minute drive is worth a couple hundred thousands.



What will drive TR to start selling? Nude brings up the exact same point that I would point out. Most of these homes were build in the eighties and the latest one in 1995 - kids growing up and time for downsizing.



Also, the federal reserve did a study on housing prices a few years back and decided that the single largest contributor to lower house prices is JOB LOSS. Think of all those mortgage companies closing in Irvine - I never knew that NewCentury was the 2nd largest employer in Irvine after UC Irvine. Wow.
 
<p><a href="http://mortgage.freedomblogging.com/2008/03/13/oc-foreclosures-fell-in-february/">http://mortgage.freedomblogging.com/2008/03/13/oc-foreclosures-fell-in-february/</a></p>

<p>







<th>Year</th>

<th colspan="2">2008</th>

<th colspan="2">2007</th>

<th colspan="2">2006</th>





Month

Defaults

Forec.

Defaults

Forec.

Defaults

Forec.





January

2,352

802

847

153

384

25





February

*1,854

732

811

164

316

14





March





986

204

407

28





April





855

234

374

22





May





1,021

276

444

37





June





1,108

311

462

13





July





1,167

367

440

44





August





1,476

469

498

59





September





1,239

444

588

78





October





1,448

530

599

104





November





933

364

665

102





December





1,895

644

688

121





<strong>TOTAL</strong>

<strong>


</strong>

<strong>


</strong>

<strong>13,786</strong>

<strong>4,160</strong>

<strong>5,865</strong>

<strong>647</strong>







</p>

<p>*preliminary</p>

<p><a href="http://www.stumbleupon.com/submit?url=http://mortgage.freedomblogging.com/2008/03/13/oc-foreclosures-fell-in-february/&title=O.C. foreclosures fell in February (Update)"><img height="16" alt="StumbleUpon O.C. foreclosures fell in February (Update)" width="16" border="0" src="http://mortgage.freedomblogging.com/images/stumbleit.gif" /> Stumble it!</a> <!--

<strong>Related:</strong>




<php related_posts(); ?>

>

--></p>

<p class="postmetadata alt">>This entry was posted on Thursday, March 13th, 2008 at 10:58 am and is filed under <a title="View all posts in REO" rel="category tag" href="http://mortgage.freedomblogging.com/category/reo/">REO</a>, <a title="View all posts in Defaults & Foreclosures" rel="category tag" href="http://mortgage.freedomblogging.com/category/defaults-foreclosures/">Defaults & Foreclosures</a>. You can follow any responses to this entry through the <a href="http://mortgage.freedomblogging.com/2008/03/13/oc-foreclosures-fell-in-february/feed/">RSS 2.0</a> feed. You can <a href="http://mortgage.freedomblogging.com/2008/03/13/oc-foreclosures-fell-in-february/#respond">leave a response</a>, or <a rel="trackback" href="http://mortgage.freedomblogging.com/2008/03/13/oc-foreclosures-fell-in-february/trackback/">trackback</a> from your own site. </p>

<p>3 Responses to “O.C. foreclosures fell in February (Update)”</p>

<ol class="commentlist">

<cite>Lou Pacific</cite> Says:


><a title="" href="http://mortgage.freedomblogging.com/2008/03/13/oc-foreclosures-fell-in-february/#comment-12127">March 13th, 2008 at 11:38 am</a>

<p>This data is somewhat skewed as I get the daily list from Dataquick for OC and I can tell you to LOOKOUT next month as I have seen an AVERAGE of 50 pages a DAY of NOD’s alone vs 8-9 pages last month. There are about 50 per page. The figures you have are way behind. It takes a month for them to update but I see the numbers on a DAILY basis! </p>

<p>Lou Pacific


Real Estate and Mortgage Company Consultant


Serving OC for 30 Years</p>

<p>By the way Matt, KEEP UP THE GREAT WORK!</p>



</ol>
 
From Calculated Risk, just a little reminder of the reality of the market:





<a href="http://calculatedrisk.blogspot.com/2008/03/dataquick-socal-home-sales-uitra-low.html">DataQuick: SoCal Home Sales "UItra-Low"</a>

<p>From DataQuick: <a href="http://www.dqnews.com/News/California/Southern-CA/RRSCA080313.aspx">Southland home sales still ultra-low; median price slips again</a> </p>

Southern California home sales limped along last month at the slowest pace ever for a February, the result of a market crippled by uncertainty and credit constraints. The median sale price dropped by a record 17.6 percent from a year ago, a real estate information service reported.





A total of 10,777 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in February. That was up 8 percent from 9,983 the previous month but down 39 percent from 17,680 in February last year, according to DataQuick Information Systems.





Last month's sales total was the second-lowest for any month in DataQuick's statistics, which go back to 1988. The prior month's total of 9,983 was the lowest ever. Since September, sales each month have been a record low for that particular month.





Of the homes that resold in February, about one-third, 33.5 percent, had been foreclosed on at some point since January 2007. A year earlier the figure was 3.5 percent. At the county level, the percent of homes resold in February that had been foreclosed on since January 2007 ranged from 25.3 percent in Orange County to 48.1 percent in Riverside County.





"Sales remained extraordinarily low, and a significant portion of what did sell was in areas beset by foreclosure activity. That's where sellers are the most motivated and price cuts are largest. Mainly it's in the inland markets, often in newer suburbs, where prices got pumped up artificially with the sort of crazy loans that no longer exist," said Marshall Prentice, DataQuick president.


...


The median price paid for a Southland home was $408,000 last month, the lowest since $402,500 in October 2004. Last month's median was down 1.7 percent from January's $415,000, and down a record 17.6 percent from $495,000 in February 2007.





Last month's median fell 19.2 percent shy of the $505,000 peak reached last spring and summer. ...





Foreclosure activity is at record levels... If it wasn't for foreclosures, the sales number would really be awful.
 
And a bit more...





<a title="Permanent Link to O.C. housing?s 6th straight month of slumber" rel="bookmark" href="http://lansner.freedomblogging.com/2008/03/13/oc-housings-6th-straight-month-of-slumber/" linkindex="221" set="yes">O.C. housing’s 6th straight month of slumber</a>

>March 13th, 2008 by Jon Lansner/O.C. Register columnist

<p><a title="blog-bottom201.png" href="http://lansner.freedomblogging.com/files/2008/03/blog-bottom201.png" linkindex="222" set="yes"><img alt="blog-bottom201.png" src="http://lansner.freedomblogging.com/files/2008/03/blog-bottom201.png" /></a></p>

<p>Just how slow have the past six months been? DataQuick’s February report tells us that since August, when the credit crunch’s grip on housing sales turned from modest drag to tight stranglehold, O.C. home sales have not hit 2,000 — no less the old low of 1,848 set in February 1995.</p>

<p>Before last summer, note that there were only three months since 1988 with less than 2,000 O.C. home buys. Look at this accompanying chart for 20 slowest months since ‘88. Please note how many recent months made this dubious list, including last July and August before mortgages became difficult to get.</p>

<p>As for more details of DataQuick’s February report, and other real estate news … Just click on the headlines below:</p>
 
Interesting, they pulled the DQ numbers on Padilla's blog. I have a feeling it is because the NOD numbers were preliminary, and they are being revised higher. That, and the original post was incorrect on how many business days there were in February vs. January.
 
<p>I've added a little info to some of the data points on the last chart you posted IR:</p>

<p>



<colgroup><col style="WIDTH: 59pt; mso-width-source: userset; mso-width-alt: 2889" width="79"></col><col style="WIDTH: 48pt" width="64"></col><col style="WIDTH: 50pt; mso-width-source: userset; mso-width-alt: 2413" width="66"></col><col style="WIDTH: 48pt" width="64"></col></colgroup>





Month

Sales

Inventory

Ratio





Jul-07

2391

18877

7.90





Aug-07

2285

19444

8.51





Sep-07

1643

19639

11.95





Oct-07

1700

19471

11.45





Nov-07

1567

19273

12.30





Dec-07

1731

18752

10.83





Jan-08

1286

17597

13.68





Feb-08

1471

16616

11.30







</p>

<p>February was higher sales on lower starting inventory...</p>
 
Not to mention that it's next to impossible to get a loan above 75% LTV in California right now. You still can, but the amount of people who can qualify are much fewer than even 3 months ago.
 
<p>"Interesting...about 9% of houses that were for sale last month sold, compared to a little more than 7% in January"</p>

<p>Don't forget, people could have locked loans in late January and early Februay that were .50-.75 lower than they are today. Hopefully that is what caused the bounciness...</p>
 
IPO - Good point...if the past is any indication, this is nothing but a spring bounce...same type of stuff going on in the early 90s.





I was skimming through some of the pending sales in South County and virtually every one is BRUTAL in terms of $ off peak sale. It doesn't sound like the problem is nearly as bad in Irvine, at least to this point.
 
Taking Steve Thomas' numbers for the last two months, inventory has increased slightly. But, the real issue is the 751 non-distressed properties taken off the market, and the 1219 distressed properties added to the market. Back in December and January, the non-distressed coming off the market was a 4 to 1 ratio on the distressed market being added. Now, distressed properties are approaching a 2 to 1 ratio being added compared to non-distressed coming off.
 
<p>"Yeah, and Ambac and MBIA are still rated AAA."</p>

<p>Do you think they will stay AAA awgee? If I recall correctly, you were expecting them to lose those ratings right? I haven't paid enough attention to know what's going on with them outside of seeing those raised a bunch of funds recently. </p>
 
<i>"If I recall correctly, you were expecting them to lose those ratings right?"</i><p>


Wrong. I do not remember ever saying that I expect them to lose their ratings. That does not sound like me. The only expectation I have of the ratings agencies is a complete denial of reality and a total disregard of facts.<p>




<i>"Do you think they will stay AAA awgee?"</i><p>




How can they stay AAA when they are not AAA now?<p>
 
<p>I'm confused awgee... Didn't their AAA ratings just get affirmed? Did they lose their AAA rating or not ever have them?</p>

<p><a href="http://online.wsj.com/article/SB120535872097231581.html?mod=yahoo_hs">http://online.wsj.com/article/SB120535872097231581.html?mod=yahoo_hs</a></p>

<p>I figured out why I thought you said they would lose their ratings. It was from this February 4th post:</p>

<p>"IMO - The biggest factor affecting home prices and home sales for the next year will be what the next two weeks brings to Ambac and MBIA. I think that looking at the number of escrows closing in the last few weeks for an indication of future sales is akin to putting one's ear to the ground between two train tracks to get a feel for the weather and concluding by a perceived sound that there is a light rain on the way which will help crops. It's possible, but if you lift your head and look up you will realize it is a locomotive with 100 cars behind it."</p>

<p>I assumed what you meant about the locomotive with 100 cars behind it was reference to the talk of them losing their ratings... Sorry about attributing something to you that you didn't post.</p>

<p>What exactly were you referencing in that post with regards to Ambac and MBIA? Has the event passed/concluded that you were watching for in early February? </p>
 
AAA ratings for Ambac and MBIA have no relation to reality anymore. MBIA is paying 14% to borrow. That's junk bond level. Likewise we're seeing a massive panic in the muni bond market, which they hypothetically insure. For a while it looked like the rating agencies would let a little reality into their rating but they've obviously decided not to. It's mindreading to guess when the raters will stop blatantly lying about the monoline insurers but they're not AAA anymore.
 
<i>"I'm confused awgee... Didn't their AAA ratings just get affirmed? Did they lose their AAA rating or not ever have them?"</i>

They have ratings, but they are not AAA and the raters have lost all credibility. MBIA and Ambac are junk and worse. Do you disagree?<p>


<i>"Sorry about attributing something to you that you didn't post."</i><p>


Thank you. It takes a big person to admit they are wrong.<p>


<i>"What exactly were you referencing in that post with regards to Ambac and MBIA? Has the event passed/concluded that you were watching for in early February? "</i><p>


MBIA and Ambac have been exposed for being the junk they are. California will no longer buy even their muni insurance. I do not have access to the exact figures right now, but their insurance biz has gone to zilch. Their CDO insurance is worthless and they and the big banks are pretending that they will be ok, but they have beeen exposed. All ABX is trashed. Large institutional investors will not buy CDO or CMO paper previously guaranteed by the monolines. The mortgage market is toast and will not recover for a long time. Do you see it differently, and if so, how?
 
<p>I have no real opinion or knowledge on the topic awgee, that's why I was asking the questions. I don't follow the issues with the insurers much at all. Heck, I don't even know what the term monoline refers to... </p>

<p>I was asking honest questions out of curiosity not in any attempt to lead you somewhere. You seem to be a knowledgeable chap on the subject so I thought you'd be a good source for some education. I appreciate your explanation/clarifications.</p>
 
Monoline means the insurer only writes one line of insurance. In the case of MBIA and Ambac, they only wrote insurance on munis. They were very conservative and profitable and deserving of their AAA ratings from Standard & Poors, Fitch, and Moodys.<p>


Then a combination of desire for higher returns and pressure from the ratings agencies and big banks encouraged them to write another type of insurance called credit default swaps. CDSs are insurance against credit default by CDOs, CMOs, and other ABS, asset backed securities. The banks originating the CDOs needed the insurance, (CDSs), from the monolines in order to get a AAA rating on the CDOs so they could sell them to pension funds, insurance companies, etc. This new line of biz was very profitable and the risk was unknown.<p>




It turns out the CDOs were much riskier and more prone to default than the calculated premiums accounted for. The monolines do not have the funds to make good on the CDSs. Since they are not solvent, no one wants their insurance any more, hence they are no longer making money. If they lose their AAA rating, then the CDOs lose their AAA rating and are worth less than the banks are carrying them on their books for and they become "worth" only that which they can sell them for. Does the term mark to market sound familiar? The big banks are panicking. They literally can not afford to have their insurance company lose it's rating. The banks do not have the money to loan the monolines to hide the monoline's insolvency.



Gotta go. More later. I have to put some girls to bed.
 
You must log in or register to reply here.
Back
Top