Terry Foch, Real Estate Transaction &Compliance Mgr

Inventory is down by over 60% in most local markets as investors as well as prospective homeowners are active. Notices of default have declined dramatically....so don't keep looking for the "shadow" inventory here. In fact, with few homes on the market, multiple offers are the new norm and prices are going up...slowly...but they are trending up in almost all market segments. Don't be afraid of short sales. New regulations and procedures are reducing the limbo period and s...hort sales will comprise a growing share of the market. If you are thinking about buying, watch the new listings every day and be prepared to make offers promptly on homes and land that meet your needs. California Home Prices Going Up, Inventory Down, C.A.R. Reports 04/16/2012 By: Esther Cho After 16 months of year-over-year declines, median home prices in California posted a gain, according to the California Association of Realtors.). The median price of a single-family home for March 2012 was $291,080, a 1.6 percent increase compared to a revised $286,550 for March 2011, and a 9.2 percent increase compared to February’s median price of $266,660. The month-over-month increase was the largest since March 2004. When breaking up prices by specific regions, the San Francisco Bay area was an exception, seeing a year-over-year decrease of 1.6 percent, but a 9.1 percent month-over-month increase. In areas, such as Los Angeles and Riverside counties, where the Federal Housing Finance Agency (FHFA) wants to implement the REO bulk sale pilot program, inventory is running at levels well below the long-run average, said C.A.R. VP and chief economist Leslie Appleton-Young. These low inventory levels demonstrate that the pilot program is not necessary in California. The pilot program involves the sale of government-owned REOs in bulk to institutional investors who will convert them into rental properties. According to C.A.R., in California, the program would call for the sale of more than 600 Fannie Mae-owned foreclosed homes in Los Angeles and Riverside counties. Recently, 19 California congressmen sent a letter to Edward DeMarco, acting director of FHFA, asking him to make California an exception to the program. C.A.R. reported that California’s housing inventory declined, with the Unsold Inventory Index for existing, single-family homes down to 4.1 months in March, compared to a revised 5.4 months in February and a 5.4 month supply in March 2011. Los Angeles county had a 4.3 month supply, and Riverside county had an even lower number, with 3.8 months of inventory. San Mateo and Santa Clara counties had notably low inventories as well, at 2.4 and 2.5 months, respectively. Not only is California’s housing inventory down, but according to C.A.R., it takes less days to sell a home there, with the time it took to sell a single-family home dropping to 53.1 days in March 2012, compared to 58.9 days in February and 57 days for March 2011.

Another Casualty of a Flawed System.. We call them "distressed sales", short sales and foreclosures and behind almost every one of them is a distressed owner. Yes, there are a few cases where owners took advantage of low cost, cash out loans and equity lines to buy cars, boats, trips, and toys, but most distressed owners are victims of the real estate bubble who bought at the wrong time or were lured into a mortgage they did not understand. Now, when an owner must sell or ...Continue reading

Where are all the new listings? Analysis of various market areas from Roseville, Rocklin, Granite Bay, up to Lincoln, Loomis, Penryn, and Newcastle, and beyond to the Auburn area and Colfax show a dramatic decline in the number of "active" listings....about 66% +/- drop in nearly every price range over the last year. Prices have been stable. The number of sales has increased only slightly, limited by the low inventory as the number of sales plus the number of pending sales... in any given month exceed the number of new listings. Multiple offers are the norm. Nevertheless, prices have remained relatively stable. The number of notices of default and of trustee sales has also declined. I don't think there is a big "shadow" inventory in our market area. Buyers and the agents representing them will have to be sharp and fast to be successful. See more

Big news from FHA: The up front mortgage insurance premium(UMPI) will increase from 1.0% to 1.75% beginning April 1st and this is no April fools day joke. The increase is necessary to "repair the health of its emergency fund." With the prolonged mortgage/debt crisis, it does make sense that the mortgage insurers raise more capital. The UMPI can still be financed into the loan. The annual insurance premium will also be increased by 10 basis points (0.1 %) for loans under $625,500 and by 35 basis points (0.35%) for higher loans. Combined with slight increases in interest rates in the last week, the buyer's dollar is being stretched a bit.

Too little too late? After months of negotiations, states attorneys general in 49 states have finally reached agreement with the five biggest loan servicers see http://www.nationalforeclosuresettlement.com/. The $25 billion settlement will provide some assistance to some beleaguered homeowners, but we have a long way to go to deal with the estimated $700 billion in negative equity across the nation. CoreLogic estimates that 27% of home owners with mortgages have 5% or less eq...uity and many are deeply underwater. The situation in California is improving with stabilizing markets, increasing sales, and pent-up demand from home buyers and investors. 2012 is looking good now. If you know anyone who is underwater and looking for help, there are programs that can help them keep their home. If a loan modification program will not work, then a short sale or a foreclosure may be the only alternatives. A short sale will leave a much smaller wound on their credit score and they will be eligible for a market rate home loan again in as little as 2- to 3-years. They should act soon. Many programs including the Mortgage Debt Forgiveness Act of 2007 expire at the end of the year. Unless the US congress extends the Act, home owners who sell short or end up in foreclosure will be taxed on the amount of the mortgage deficiency which is reported to the IRS on a 1099. The Mortgage Debt Forgiveness Act of 2007 waives the federal income taxes for most home owners on the deficiency.