Mortgage defaults dipped in San Diego County last month to their lowest level since January, as distressed-property owners found alternatives to foreclosure, MDA DataQuick reported Monday.
Other signs of distress seemed be easing, as delinquencies stopped growing, banks acted on their foreclosure backlogs, more homes were listed for sale and there were more building permits. Some real estate industry analysts read the figures as another sign the housing market is stabilizing at or near the bottom.
“I think we’re nearing the bottom, and I think it’s time to come onto the market,” said Mark Goldman, a real estate instructor at San Diego State University. “I was much more pessimistic a few months ago.”
Defaults, the first step on the path to foreclosure, dropped from 3,371 in April 2009 and 2,263 in March to 2,105 last month. This trend, along with last week’s reports that mortgage delinquencies in San Diego are not growing, suggested that distress is easing in many parts of the county.
Only 14 neighborhoods saw more defaults in April than year ago, while 71 had fewer, DataQuick said. The increases occurred in some higher-end areas, such as Del Mar, Coronado and Tierrasanta, but the counts were relatively low.
DataQuick analyst Andrew LePage said he noticed that the pricey North County coast, excluding low-cost Oceanside, had a higher share of the county’s defaults in April than a year ago.
“The high-end, particularly along the coast, has had a relatively small but growing increase,” he said.
But with more distress has come more sales activity, he said.
“What distress does is motivate sellers, along with people who are more resigned to the new reality and are realizing the market of yesterday won’t be here for a long time,” LePage said.
Goldman said the latest numbers reflect growing consumer confidence. But distress is every bit as troublesome as before.
“We’ve got to be a little guarded about watching these trends for determining the condition of the housing market,” he said.
That’s because some owners are trying to get their mortgages modified or arrange for short-sales — selling for less than their mortgage balance — to avoid the harsh credit penalties associated with foreclosure.
“Delinquencies tell me there’s still stress on the market,” he said, pegging the national rate at 13 percent; San Diego’s rate is slightly less. “I’d expect that rate of delinquencies to continue. It’s abating but not ebbing, not declining. I would expect the number of households in peril to remain constant.”
According to MDA DataQuick, for the fourth straight month, the median home price for San Diego County remained at $325,000 for November. This is the first time in 21 years of tracking that the median price has stayed the same for so long. Although there is a lot going on "behind the numbers", the obvious sign is that it signals a firmness in home prices in most County areas. Some of the factors at work in the data include continued demand for lower-cost homes, dropping inventories of homes for sale, historically low interest rates, and a bit of improvement in economic conditions and consumer confidence. In terms of home sales, there were 3,148 transactions in November. This was down 14.2 percent from October, but the count was up year over year which has been the case since July 2008. The 17.8 percent increase from November 2008 was the strongest upturn since last June's 20 percent rise. The big unknowns remain the general health of the mortgage markets and the unemployment rate.
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Just having passed through the U.S. Senate, the much-awaited Federal Tax Credit for home-buyers has been extended beyond the original November 30, 2009 termination date.
As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.
Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The legislation maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.
The bottom line is, NOW is a great time to buy a home! Call us TODAY to see how you can take advantage of this buyer's market!
MDA DataQuick, a data-collection agency reported yesterday that the median home price in San Diego County stayed at $325,000 last month; unchanged from August. It was the ninth month in a row that the median has either increased or stayed the same. A DataQuick analyst said the increase has been driven less by any improvement in individual property values than by a shift in the mix of properties that are selling. Although more than half of all resale homes that sold last winter (2008) had gone through foreclosure, last month it was down to 36 percent. Simultaneously, home sales are up in higher-priced areas of the County. DataQuick's figures showed the median price for single-family resale properties rose slightly to $365,000 and was up 1.5 percent from last year. It was the first yearly increase since August 2007. The overall median nearly matched its year-ago level of $328,000.
The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to C.A.R.’s "2010 California Housing Market Forecast," presented today at CALIFORNIA REALTOR® EXPO 2009 in San Jose. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
“California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said C.A.R. President James Liptak.“This follows two years of double-digit sales declines in 2006 and 2007.Looking ahead, we expect sales to moderate to a more sustainable pace.”
“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added.“2010 will mark the beginning of the ‘new normal’ for California’s housing market.This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young.“We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer.For the year as a whole, home prices are forecast to reach $280,000. The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government.”
