First FHFA REO Bulk Sale Awarded

A while ago we heard that REO's were going to be sold in bulk to investors. I have read that the California Association of Realtors (C.A.R.) is against this. The C.A.R. feels, rightfully so, that we need the listings on the market for traditional home buyers.

The bulk sales are going to be sold to investors, after they have determined they are worthy of the properties and will do with them what the FHFA had intended.

Many are occupied, so the investors will become landlords. The first bulk sale was in Florida, one of the hardest hit states of the housing bust. 699 units were in this transaction, just over 500 had people living in them. The estimated value to Fannie Mae is 78.1 million. These properties were apparently sold at near, or even above, market value.

Through this pilot program, almost 2500 Fannie Mae foreclosed homes are scheduled for bulk sale in neighborhoods of Las Vegas, Phoenix, Chicago, Nevada, Arizona, and the Riverside and Los Angeles areas of California.

Bulk sales in housing...not sure if this is a good idea or not. While we want to clear out as many REO's as fast as possible with the least amount of burden to the taxpayers....we really need more homes for our buyers.....What say you?

Santa Clarita MLS Stats

Wow, how the tables have turned!

I make no guarantee on the accuracy of what type of listing is marked in our MLS...there are errors, trust me....but, you'll get the picture! That would be why the numbers don't add up to the totals....all the time...

Total number of ACTIVE listings in our Santa Clarita Valley communities: 391 ~ Obscenely low inventory!
Of that obscene inventory:
Standard Sales ~ 253
Short-Sales ~ 99
REO's ~ 35

Total that are either in PENDING or Supposedly taking BACK-UP offers: 1132, Crazy, isn't it?
Of that crazy number:
Standard Sales ~ 237
Short-Sales ~ 807
REO's ~ 80

And, the number of SOLD, or closed escrow in the last 30 days: 325 ~ Pretty typical.
Of that typical amount:
Standard Sales ~ 132
Short-Sales ~ 144
REO's ~ 50

While, again, I am happy that more Standard Sellers are able to come on the market, we still have a ways to go.

 More REO's would be nice to have to sell, wouldn't they?

About 1/2 Paid Out for ROBO Settlement Already

Seems like we are all hearing more and more success stories about Short-Sales completing, Loan Modifications working, and Principal Reductions being authorized. Don't yell at me! I know it's not happening for everyone, but it is happening, and for the ones that are eligible, it's happening a tad quicker.

Apparently to the tune of about 140,000 homeowners and 10.6 Billion dollars in the second quarter of this year. The 5 big banks that were part of the Robo-Signing Settlement ~ Bank of America, Chase, Ally, Wells Fargo, and Citi ~ have all been working hard to follow through on the terms of the settlement.

The largest category of relief so far, no surprise, is in Short-Sales. Tons of them happening, lots of short pay-offs. And, Bank of America is the one that has provided the most relief to the struggling homeowners.

California, my beautiful state, received the most money of any state, with about 4.6 billion in assistance.

I wonder though, what do you think will happen when the 25 billion settlement is fulfilled?

First Time Investors Beware

Prices are going up, that's it. I could just stop this post with that one line.

But, I won't....Reading an article today confirms what I already know. Investors are backing off in the purchase of properties. They have seen, as I have (and every other Realtor that is working) seen in the last few months, that prices are on the rise.

As always, when making the decision to invest in a property, other than the one you will live in, you absolutely must do the math. Make sure that you work the numbers to see if there is enough profit and/or ROI in the deal to make it worthwhile. With prices inching up, it has become less desirable for investors. 

Now, I'm not saying there aren't still deals to be had, there are, but they are harder to come by. Anyone that is regularly reading my blog knows this. To re-cap, inventory is at ridiculously low levels, as are interest rates. And, interest rates this low are one of the main drivers in this purchase market.

We are also seeing more Traditional sellers come on the market. Due to the desirability of an 'easy' sale, they are generally getting more than the Short-Sales and REO's. 

With the market flipping from where it was just a few months ago, it's going to be even more important not to leap without doing your arithmetic. We have less distressed properties on the market, and less coming down the pipe-line. And, with a couple of the groups I network with I am seeing more 'Hey, I've got a rental available' than I did a few months ago. But, I hope you who have already made the leap of Real Estate faith, used a vacancy factor and a reduced rent factor in your original calculations.

Be careful out there. Look before you leap.

For any questions about Real Estate in the Santa Clarita Valley and it's surrounding communities:

Lauren@KeepYourWitz.com

Average Days On Market

From start to finish sellers want to know how long it's going to take to sell their home. Any good Realtor knows that there are many factors in determining the likely answer to that question.

What type of market are we in ~ buyers market or sellers market?
Is the seller going to prep the house for sale?
Will the seller price it appropriately?
What price range is the property in?
How many buyers are buying in that range every month?
How many listings are on the market, now and 3 months ago?
What selling season are we in?
What's your competition?
I could keep going, but you get the picture.

With that in mind I thought I'd share with you a different type of stat than I've shared before. Let me know if you find it interesting, let alone worth reading.

In the last 90 days of home that have closed escrow according to our local MLS; below is information about the Average Days On Market ~ i.e. how long did it take to sell a home.

Under 250k ~ 324 homes sold ~ ADM = 102
250-500k ~ 568 homes sold ~ ADM = 87
500-750k ~ 98 homes sold ~ ADM = 95
750k-1M ~ 25 homes sold ~ ADM = 130
And, 1M + ~ 14 homes sold ~ ADM = 86

Looking at those same categories, but just Traditional (Standard) Sellers:

80/65
247/57
65/80
21/142
11/100

Any way you look at it, the average time to sell a home, anticipating a 35 day escrow period, is between a month or two. I can pick them apart further for you, but I could bet you that the ones that moved quicker were the ones that were priced right. And, the ones that took longer experienced a price reduction or two.

Now, you're thinking, "but dang, I've seen properties going out with multiple offers in just a couple of days". And, you would be right. But, you would be wrong if you thought the ones priced well over current market value were part of that 'but, dang'.

I can sell a gorgeous home, a mansion, a sweet little pink house, a condo, a swamp....to anybody. There is a buyer for every type of property, everywhere. Price is what makes the ultimate reason for a home selling. And, price is what makes the average days on market be long or be short.

How long do you want to be on the market?

FICO or Veritas?

So, we've heard some buzz about FICO re-working their scoring to help accommodate the Short-Sale and Foreclosure dings, if those are the only dings.

A newer evaluation system called Veritas (Latin for Truth) developed by a company called Digital Risk is suggesting their way of determining a borrowers credit-worthiness is much better than the old faithful FICO.

They've been doing a lot of studying due to the housing bust, focusing on strategic defaults it would appear. Why someone would be a risk of strategic default and another not, with the exact same FICO scoring.

From my article reading activity this morning, LA Times writes: In early August it introduced a multidimensional risk evaluation system it calls "Veritas," which it says integrates borrower credit characteristics with property and local real estate market data along with proprietary behavioral prediction models. The behavioral component includes what the firm calls statistical "clusters" of borrower, property and market situations — 123 in all — that give lenders a better idea of how an applicant will react to financial problems, such as the next recession or housing downturn. 

You can read the entire article here: Reading Article of The Day

I think an updated version of FICO scoring is great, I am concerned that lenders may have to rely on psychoanalysis of their clients now. That's a pretty subjective arena. What do you think?

Construction Slowed, But Building Permits Rose

One of the indicators of a turning market is the amount of new construction. It fuels movement in the Real Estate arena. And, if there isn't anything to feed the fire, it just shoots up puffs of smoke. Of course.

So, while the actual construction dropped a tad this past month, the increase in PERMITS is the highest it's been in 4 years. Compared with July 2011, overall permits saw a 29.5% rise. What's that say to you?

If the big dogs, the builders, the contractors, the people with a boat-load of money to invest in housing, feel that it's time to push for more permits, to prep for more home building, then it's just another indicator that we are moving out of the slump.

Interest rates have been creeping up the last few weeks, inventory took a teeny spike (one day this week we actually had 30 more units on our MLS than less), builders are calling out for more permits, and many housing reports are showing optimism.

Although I still believe we have a long way to go before we hit a 'normal' market, there have been several good indicators. I'm going with those. But, really, I don't know if I remember a 'normal' market, do you?