California and Northern San Diego Housing Update
-
Upload
foreclosureradar -
Category
Real Estate
-
view
394 -
download
0
description
Transcript of California and Northern San Diego Housing Update
California and San Diego Market Update
Presented by
Madeline SchnappDirector of Economic Research, ForeclosureRadar
How to Understand (and leverage) Market Conditions Today
Agenda
• California and San Diego Market Update• Housing Market Recovery?• 2013 Forecast • Introducing PropertyRadar
Inventory at or near record lows
Jan-
90
Jan-
91
Jan-
92
Jan-
93
Jan-
94
Jan-
95
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
130
2
4
6
8
10
12
14
16
18
20
California Unsold Inventory Index Months of Available Inventory - January 1990 to February 2013
Mo
nth
s o
f U
ns
old
Inv
en
tory
Source: California Association of Realtors – CAR.org
Prices up sharply in 2012
Source: California Association of Realtors – www.car.org
Jan-
90
Jan-
91
Jan-
92
Jan-
93
Jan-
94
Jan-
95
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13$150,000
$250,000
$350,000
$450,000
$550,000
$650,000
Median Home Prices - California and San Diego CountyJanuary 1990 through January 2013
California
San Diego
Me
dia
n H
om
e P
ric
es
($
)
Prices Begin to Rise January 2012
Government intervention
Septe
mbe
r 200
6
Decem
ber 2
006
Mar
ch 2
007
June
200
7
Septe
mbe
r 200
7
Decem
ber 2
007
Mar
ch 2
008
June
200
8
Septe
mbe
r 200
8
Decem
ber 2
008
Mar
ch 2
009
June
200
9
Septe
mbe
r 200
9
Decem
ber 2
009
Mar
ch 2
010
June
201
0
Septe
mbe
r 201
0
Decem
ber 2
010
Mar
ch 2
011
June
201
1
Septe
mbe
r 201
1
Decem
ber 2
011
Mar
ch 2
012
June
201
2
Septe
mbe
r 201
2
Decem
ber 2
012
Mar
ch 2
013
0
10,000
20,000
30,000
40,000
50,000
60,000
California Foreclosure ActivitySeptember 2006 through March 2013
Notice of Default
Notice of Trustee Sale
Foreclosure Sales
Nu
mb
er
of
No
tic
es
or
Sa
les
Source: ForeclosureRadar – www.foreclosureradar.com
Foreclosure activity slowing…
7
Foreclosure activity slowing…
Septe
mbe
r 200
6
Decem
ber 2
006
Mar
ch 2
007
June
200
7
Septe
mbe
r 200
7
Decem
ber 2
007
Mar
ch 2
008
June
200
8
Septe
mbe
r 200
8
Decem
ber 2
008
Mar
ch 2
009
June
200
9
Septe
mbe
r 200
9
Decem
ber 2
009
Mar
ch 2
010
June
201
0
Septe
mbe
r 201
0
Decem
ber 2
010
Mar
ch 2
011
June
201
1
Septe
mbe
r 201
1
Decem
ber 2
011
Mar
ch 2
012
June
201
2
Septe
mbe
r 201
2
Decem
ber 2
012
Mar
ch 2
013
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Foreclosure Activity - San Diego CountySeptember 2006 through March 2013
Notice of Default
Notice of Trustee Sale
Foreclosure Sales
No
. of
No
tic
es
or
Sa
les
Number of days to foreclose explodes
Lack of REO Inventory
In March 2013, REO’s 14% of home sales down from 62% in March 2009
– 1,794 homes taken back in March 2013 in CA• Down 94% from peak of 27,980 in July 2008• Down 83% from average of 10,467/mo in 2011• 101 in San Diego County, down 84% from 2011 monthly avg. of 638
– California’s current REO Inventory is 52,776• About 4 months worth of inventory• Takes banks 9 months to resell on average• No excess inventory of bank owned homes!!!• 2,899 REOs in San Diego County
Foreclosures will be with us for awhile
~10 Million Homes
6.3 Million Mortgages1.7 Million Underwater380,000 Delinquent95,000 in Foreclosure 58,000 Bank Owned15,000 Distressed Sales
533k / 15,000=
~36 Months
Shadow inventory real but no wave
~10 Million Homes
6.3 Million Mortgages1.7 Million Underwater380,000 Delinquent95,000 in Foreclosure 58,000 Bank Owned15,000 Distressed Sales
~ 1.75M /15,000
= ~ 10 Years
Housing Market Recovery?
Housing Recovery Dependent on Jobs and Income
Rising Employment
Rising Incomes
California employment on the rise
San Diego County Employment
Mar
ch 2
005
Mar
ch 2
006
Mar
ch 2
007
Mar
ch 2
008
Mar
ch 2
009
Mar
ch 2
010
Mar
ch 2
011
Mar
ch 2
012
Mar
ch 2
013
(40,000)
(30,000)
(20,000)
(10,000)
-
10,000
20,000
30,000
40,000
San Diego County Employment GrowthMarch 2005 through March 2013
Nu
mb
er
of
Jo
bs
California personal income gaining ground
2000
-01-
01
2000
-07-
01
2001
-01-
01
2001
-07-
01
2002
-01-
01
2002
-07-
01
2003
-01-
01
2003
-07-
01
2004
-01-
01
2004
-07-
01
2005
-01-
01
2005
-07-
01
2006
-01-
01
2006
-07-
01
2007
-01-
01
2007
-07-
01
2008
-01-
01
2008
-07-
01
2009
-01-
01
2009
-07-
01
2010
-01-
01
2010
-07-
01
2011
-01-
01
2011
-07-
01
2012
-01-
01
2012
-07-
01$120,000
$130,000
$140,000
$150,000
$160,000
$170,000
$180,000
California Personal Income (Millions of Dollars)Q1 2000 through Q3 2012
Inc
om
e (
Mill
ion
s o
f $
)
What does a housing recovery look like?
Rising Prices Increase in Market Activity
Increase in Building Activity
Market Activity Slows…
Mar
ch 2
006
June
200
6
Septe
mbe
r 200
6
Decem
ber 2
006
Mar
ch 2
007
June
200
7
Septe
mbe
r 200
7
Decem
ber 2
007
Mar
ch 2
008
June
200
8
Septe
mbe
r 200
8
Decem
ber 2
008
Mar
ch 2
009
June
200
9
Septe
mbe
r 200
9
Decem
ber 2
009
Mar
ch 2
010
June
201
0
Septe
mbe
r 201
0
Decem
ber 2
010
Mar
ch 2
011
June
201
1
Septe
mbe
r 201
1
Decem
ber 2
011
Mar
ch 2
012
June
201
2
Septe
mbe
r 201
2
Decem
ber 2
012
Mar
ch 2
013
0
10,000
20,000
30,000
40,000
50,000
60,000
Monthly Trend of California Real Estate SalesDistressed vs. Equity Sales
January 2006 through March 2013
Distressed Sales
Non-Distressed Sales
Sa
les
Vo
lum
e
Q1 2013 sales
Distressed Property Sales Decline in Q1 2013
Janu
ary 2
012
Febru
ary 2
012
Mar
ch 2
012
April 2
012
May
201
2
June
201
2
July
2012
Augus
t 201
2
Septe
mbe
r ...
Octobe
r 201
2
Novem
ber .
..
Decem
ber .
..
Janu
ary 2
013
Febru
ary 2
013
Mar
ch 2
013
35%
40%
45%
50%
55%
60%
65%
70%
Distressed Property Sales - % of Total SalesJanuary 2012 to March 2013
Market Activity Slows
2002
Q1
2003
Q1
2004
Q1
2005
Q1
2006
Q1
2007
Q1
2008
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
California Real Estate SalesNon-Distressed v. Distressed (Short Sales and Bank REO
Resales)
Short Sale
Bank REO Resale
Non-Distressed Sale
Sa
les
Vo
lum
e
….But Not in San Diego County
2002
Q1
2003
Q1
2004
Q1
2005
Q1
2006
Q1
2007
Q1
2008
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
3,000
3,750
4,500
5,250
6,000
6,750
7,500
8,250
9,000
Total Q1 Sales Comparison - California, San Diego CountyQ1 2002 to Q1 2013
Total California Sales
Total San Diego Sales
Sa
les
Vo
lum
e
Sa
les
Vo
lum
e
Cash Sales Now 30% of Total Sales
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
20,000
40,000
60,000
80,000
100,000
120,000
140,000
0%
5%
10%
15%
20%
25%
30%
35%
Cash Sales, Volume and % of Total Sales2001 through 2013 YTD
Cash Sales
Cash Sales as % of Total Sales
Sa
les
Vo
lum
e
% o
f T
ota
l Sa
les
Cash sales through
March 2013
California home building permits on the rise
Negative Equity on the Decline
Homeowner equity criticalto housing recovery
Home equity slowly improving
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
35%
45%
55%
65%
Annual Trends of Mortgage Debt-to-Value Ratio (%)1995 to 2012
Mo
rtg
ag
e D
eb
t-to
-Va
lue
Ra
tio
(%
)
Negative equity on the decline
Source: CoreLogic – www.corelogic.com
Q4 20
09
Q1 20
10
Q2 20
10
Q3 20
10
Q4 20
10
Q1 20
11
Q2 20
11
Q3 20
11
Q4 20
11
Q1 20
12
Q2 20
12
Q3 20
12
Q4 20
1224%
28%
32%
36%
California Negative Equity (%)Q4 2009 to Q4 2012
Ne
ga
tiv
e E
qu
ity
Sh
are
(%
)
Negative Equity
-25%
or G
reat
er
-21%
to -2
5%
-16%
to -2
0%
-11%
to -1
5%
-6%
to -1
0%
-1%
to -5
%
0% to
5%
Great
er th
an 5
%
-
200
400
600
800
1,000
1,200
1,400
California Homeowner Equity, March 2013
Equity
Nu
mb
er
of
Ho
me
ow
ne
rs (
in T
ho
us
an
ds
)
5.3 million home-owners have 5% or more equity in their
properties
Negative Equity
5% 10% 15% 20% 25%0
200
400
600
800
1,000
Number of California Homeowners that Exit Negative Equity Positions if
Home Prices Increase by Certain Amounts
Increase In California Home Prices
Nu
mb
er
of
Ca
lifo
rnia
Ho
me
ow
ne
rs
(in
Th
ou
sa
nd
s)
2013 Forecast
Demand will remain strong
• QE ∞ will keep interest rates low• In many parts of CA rents higher than
house payments• Early foreclosure “victims” may now
qualify again for a mortgage and choose to buy
Supply will remain tight
• Government intervention will continue to slow foreclosures, ie. CA Homeowner’s Bill of Rights
• Homeowners with equity not moving up• 2 million underwater homeowners can’t
buy or sell (except short)• New home supply lagging demand• Lack of REO inventory• Short sales will likely increase
Home prices will rise
• Lack of supply, and continued demand will put upward pressure on prices
• But increases will be constrained:– By Credit Terms– By Appraisals– By Affordability and ROI
Other factors
• More households will become renters than homeowners through short sales and foreclosures
• Trustee sale investors will continue to see strong competition, though institutional investors will exit as rental ROI’s decline, leaving more opportunity for flippers
Putting your head in the sand is not going to find you inventory
Farming for Inventory – A Story
PropertyRadar Introduction
• Expanding beyond foreclosures to ALL properties• All the functionality from ForeclosureRadar and more
• New modern HTML 5 user interface• Same functionality on both computers and tablets• No more FLASH
• Powerful new search and analysis tools• Expanded search criteria• New mapping tools• Filter buttons• And much more
Driving a Neighborhood with a Client
Expertise at your Fingertips!
Driving with a client, they are interested in this home
Explore Mode
Property Details
$550.000
Get a Broader View of Neighborhood
Are Many People Underwater?
Explore Mode
Are there Lots of Foreclosures?
How Stable is the Neighborhood?
Show the Aerial View, Property Type, Est. Value, and much more!
Property Search
Access to over 100 Search Criteria!
Farm For Near NegativeEquity Homeowners that have Lived in their Homes for 8 or
More Years.
Pick Your Geography
Single Family Home
3 Bedrooms
With the Value You Want
Find Near Negative Equity Properties
That are not the Primary Residence
Search Results
Search Out the Owner
$550,000
Owner in Linked in
– Farm for short sale opportunities
– Locate and mail to renters who may eventually become buyers
Other opportunities to find inventory
San Diego County Comeback
Commercial Property Opportunities
Commercial Property Opportunities
Commercial Property Opportunities
Commercial Property Opportunities
Commercial Property Opportunities
Sign Up for our free monthly Property Report
http://www.foreclosureradar.com/reports
Sign Up for NSDCAR’s PropertyRadar Training 9 AM June 24th to learn how to find listings
http://www.nsdcar.com/events-cal/
Get ahead of the competition!
Thank You!
FREE 3-Day Trialwww.ForeclosureRadar.com
Basic Subscription Price: $49.95/Mo.
CAR Members receive a 10% Discount
Will Also Get You Access to PropertyRadar
Month-to-Month Agreement
Email: [email protected]