Jim Guido's Blog

It is being reported that the  housing market faces several more years with 800,000 to 1 million new foreclosed properties per year.

A recent analysis at Bank of America Merill Lynch estimated that REO sales would not peak until 2013 when nearly 1.5 million properties would be sold.

Also according to RealtyTrac, there have been 8.9 million homes lost to foreclosure since 2007 which was the height of the credit crisis.

The report doesn’t see a spike happening, but rather a slow and steady burn in order to spare home prices from further reductions. Today, roughly 4 million homes sell per year. If  the estimated 1.5 million REO’s are sold, that would be almost 40% of the market and that would be double the current market share of these properties.

It is possible that we’re not going to see a peak this year in REO sales and that dramatically different than what we’ve been seeing over the past few years. This would be partly due to relatively weak demand, partly due to inventory control that appears to be being executed by the lenders and servicers. This might be partly due to the fact that foreclosure processing, evictions and redemption periods have all become extended.

The largest delay came when servicers were found to be improperly foreclosing on homeowners last year. As reported by RealtyTrac the delays, investigations and ongoing attorneys general settlement talks pushed more than 1 million foreclosures that were supposed to occur in 2011 to 2012.

Another report states that mortgages facing foreclosure are delinquent an average of 611 days. Once a foreclosure is initiated it can take as long as 400 days to complete. With this type of delay a loan entering foreclosure in December 2011 won’t hit the market as an REO until January or February 2013.

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today that California home sales fell in July but were up from the previous year.

As reported closed escrow sales of existing, single-family detached homes in California dropped 4.1 percent to a seasonally adjusted 458,440 units in July. This  information was collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  July home sales were up 4.5 percent from the 438,850 units sold in July 2010.  The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the July pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

July sales did improve over last year but they were somewhat weaker than expected with the current prices and mortgage rates. The Economic uncertainty and recent developments in financial markets have caused hesitation among buyers, the effects of which we may see in the coming months.  We really need to see sustained job and income gains along with an increase in consumer confidence before we can expect to see consistent improvement in the housing market.

The statewide median price of an existing, single-family detached home sold in California dipped 0.3 percent in July to $294,230 from a revised $295,210 in June.  July’s median price was down 7.6 percent from the $318,550 recorded in July 2010.

C.A.R.’s report July also included the following:

• The Unsold Inventory Index for existing, single-family detached homes was 5.5 months in July, up from 5.0 months in June, but essentially unchanged from July 2010’s 5.6-month supply. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
• Thirty-year fixed-mortgage interest rates averaged 4.55 percent during July 2011, virtually unchanged from 4.56 percent in July 2010, according to Freddie Mac.  Adjustable-mortgage interest rates averaged 2.97 percent in July 2011, compared with 3.73 percent in July 2010.
• The median number of days it took to sell a single-family home was 52.1 days in July 2011, compared with 42.4 days for the same period a year ago.
• View Unsold Inventory by price point.

San Jose Summary

Average price per square foot for San Jose CA was $289, a decrease of 6.8% compared to the same period last year. The median sales price for homes in San Jose CA for May 11 to Jul 11 was $400,000 based on 2,258 home sales. Compared to the same period one year ago, the median home sales price decreased 7%, or $30,000, and the number of home sales decreased 35.8%. There are currently 2,631 resale and new homes in San Jose on Trulia, including 34 open houses, as well as 3,922 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in San Jose CA was $553,597 for the week ending Aug 03, which represents an increase of 1.2%, or $6,555, compared to the prior week. Popular neighborhoods in San Jose include Willow Glen and Edenvale, with average listing prices of $737,225 and $402,892.

San Jose Homes For Sale

San Jose Recently Sold Homes

Below you will find the first quarter of 2011 California home values information for the Bay Area as presented by the National Association of

Realtors

San Jose-Sunnyvale-Santa Clara                                    560.0              545.0                                 -2.7