(Reuters) - Walt Disney Co is banking on wealthy home buyers to plonk down some green on a luxury residential resort in Florida, defying the state's infamously high foreclosure rate.
U.S.
The company on Wednesday unveiled plans for its Golden Oak luxury homes at Walt Disney World Resort in Orlando, Florida.
Disney said it will offer fewer than 30 home sites for sale this year, at prices between $1.5 million and $8 million.
The gated community on a 980-acre development will eventually boast 450 homes and a Four Seasons hotel, where residents can enjoy a full-service spa and restaurants.
The Mouse House's blueprint calls for putting some of its wealthiest fans on the doorstep of its biggest theme park.
But it also comes as Florida muddles through a nationwide real estate crisis that, according to research firm RealtyTrac, has given the state a foreclosure rate that trails only Nevada and Arizona.
One in every 174 Florida properties received a foreclosure notice last month, RealtyTrac said.
Disney will allow home buyers at Golden Oak to hire their own architects, but they will be restricted to such styles as Venetian, Spanish Revival
Friday, June 25, 2010
California median home price rises in month
by Jacob Adelman, AP Real Estate Writer
Published Thursday, 24-Jun-2010 in issue 1174
LOS ANGELES (AP) - The median home price in California last month surged 20.9 percent from May 2009 to $278,000, as inventories of low cost foreclosures dwindled and transactions in midrange and high end neighborhoods claimed a greater share of sales, a tracking firm reported Thursday.
Last month’s median was up from $230,000 a year ago and up 9 percent from $255,000 in April, San Diego based MDA DataQuick said. The May median, which marked a seventh consecutive month of year over year increases, was at its highest level since October 2008.
DataQuick President John Walsh said some of the higher priced homes were reaching the market because of increasing economic troubles among middle and upper class families, who are compelled to sell.
But he said low mortgage rates and the now expiring federal tax credit for home buyers also had helped boost the proportion of more expensive homes within the sales mix.
“For now, at least, we’re seeing a more normal mix of sales across the region and across price categories,” Walsh said.
Sales of homes costing $500,000 or more made up 21.2 percent of all transactions in the state last month, up from 16.5 percent a year ago, DataQuick said.
Foreclosures, meanwhile, which typically account for the lowest priced homes, comprised 35.5 percent of resales last month, dropping from 50.2 percent a year ago to reach their lowest level since March 2008, the firm said.
John Husing, an economist with San Bernardino County based Economics & Politics Inc., said there have been far fewer foreclosures on the market, as banks become increasingly willing to reach alternative arrangements with delinquent borrowers.
“Banks haven’t followed through on the foreclosure process, which means the supply of foreclosures hasn’t been entering the market and that has been slowing down sales,” Husing said.
Walsh, however, cautioned that banks are still thought to be carrying large numbers of foreclosed properties on their books and that it was unknown when and how these homes would go on sale.
“Price stability would be threatened if lenders suddenly pushed much larger numbers of distressed properties onto the market,” he said.
DataQuick also said 40,965 homes were sold in the region in May, up 4.9 percent from 39,051 in May 2009. May’s sales were up 9.3 percent from 37,481 in April.
In a nine county region of Northern California, sales rose 11 percent to 8,264 in May from a year earlier. In the six county region of Southern California, sales increased 7.2 percent to 22,720 from May 2009.
The median home price in Northern California jumped 20.1 percent to $410,000 last month from $341,500 in April 2009. In Southern California, the median price surged 22.5 percent to $305,000, up from $249,000 in the year ago period.
Published Thursday, 24-Jun-2010 in issue 1174
LOS ANGELES (AP) - The median home price in California last month surged 20.9 percent from May 2009 to $278,000, as inventories of low cost foreclosures dwindled and transactions in midrange and high end neighborhoods claimed a greater share of sales, a tracking firm reported Thursday.
Last month’s median was up from $230,000 a year ago and up 9 percent from $255,000 in April, San Diego based MDA DataQuick said. The May median, which marked a seventh consecutive month of year over year increases, was at its highest level since October 2008.
DataQuick President John Walsh said some of the higher priced homes were reaching the market because of increasing economic troubles among middle and upper class families, who are compelled to sell.
But he said low mortgage rates and the now expiring federal tax credit for home buyers also had helped boost the proportion of more expensive homes within the sales mix.
“For now, at least, we’re seeing a more normal mix of sales across the region and across price categories,” Walsh said.
Sales of homes costing $500,000 or more made up 21.2 percent of all transactions in the state last month, up from 16.5 percent a year ago, DataQuick said.
Foreclosures, meanwhile, which typically account for the lowest priced homes, comprised 35.5 percent of resales last month, dropping from 50.2 percent a year ago to reach their lowest level since March 2008, the firm said.
John Husing, an economist with San Bernardino County based Economics & Politics Inc., said there have been far fewer foreclosures on the market, as banks become increasingly willing to reach alternative arrangements with delinquent borrowers.
“Banks haven’t followed through on the foreclosure process, which means the supply of foreclosures hasn’t been entering the market and that has been slowing down sales,” Husing said.
Walsh, however, cautioned that banks are still thought to be carrying large numbers of foreclosed properties on their books and that it was unknown when and how these homes would go on sale.
“Price stability would be threatened if lenders suddenly pushed much larger numbers of distressed properties onto the market,” he said.
DataQuick also said 40,965 homes were sold in the region in May, up 4.9 percent from 39,051 in May 2009. May’s sales were up 9.3 percent from 37,481 in April.
In a nine county region of Northern California, sales rose 11 percent to 8,264 in May from a year earlier. In the six county region of Southern California, sales increased 7.2 percent to 22,720 from May 2009.
The median home price in Northern California jumped 20.1 percent to $410,000 last month from $341,500 in April 2009. In Southern California, the median price surged 22.5 percent to $305,000, up from $249,000 in the year ago period.
Wednesday, June 23, 2010
New home sales plummet to record low
NEW YORK (CNNMoney.com) -- New home sales plummeted to a record low in May, the first month following the expiration of the homebuyer tax credit. This snapped a two-month streak of gains.
New home sales declined 32.7% to a seasonally adjusted annual rate of 300,000 last month, down from an downwardly revised 446,000 in April, the Commerce Department reported Wednesday. Sales year-over-year fell 18.3%.
This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.
"We expected a slowdown, but the extent of this decline was a surprise," said Anika Khan, an economist at Wells Fargo. The figure was even worse than her relatively pessimistic forecast of an annual rate of 380,000 in May.
A consensus of economists surveyed by Briefing.com had expected May sales to slide to an annual rate of 430,000.
"Clearly, the lack of a tax credit had a lot to do with it, and it's going to be a bit of a bumpy road ahead as we get a few more months of payback," Khan said.
Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.
Homebuyers have until June 30 to close deals, but the Senate may vote to push that deadline back to Sept. 30.
Khan expects home sales to remain depressed through the third quarter as home construction continues to contract and lending standards remain tight. But, she said, sales should pick up slightly in the fourth quarter.
Although, she added, we are still years away from a normal level of new home sales -- an annual rate between 800,000 and 900,000.
"A full housing recovery is contingent on employment," Khan said. "When we see the unemployment rate abate, and some growth in salaries and incomes, we'll get some sustainable momentum in the housing market."
A real estate industry report released earlier this week showed that existing home sales, based closed sales rather than signed contracts, slipped slightly last month but remained elevated.
New home sales declined 32.7% to a seasonally adjusted annual rate of 300,000 last month, down from an downwardly revised 446,000 in April, the Commerce Department reported Wednesday. Sales year-over-year fell 18.3%.
This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.
"We expected a slowdown, but the extent of this decline was a surprise," said Anika Khan, an economist at Wells Fargo. The figure was even worse than her relatively pessimistic forecast of an annual rate of 380,000 in May.
A consensus of economists surveyed by Briefing.com had expected May sales to slide to an annual rate of 430,000.
"Clearly, the lack of a tax credit had a lot to do with it, and it's going to be a bit of a bumpy road ahead as we get a few more months of payback," Khan said.
Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.
Homebuyers have until June 30 to close deals, but the Senate may vote to push that deadline back to Sept. 30.
Khan expects home sales to remain depressed through the third quarter as home construction continues to contract and lending standards remain tight. But, she said, sales should pick up slightly in the fourth quarter.
Although, she added, we are still years away from a normal level of new home sales -- an annual rate between 800,000 and 900,000.
"A full housing recovery is contingent on employment," Khan said. "When we see the unemployment rate abate, and some growth in salaries and incomes, we'll get some sustainable momentum in the housing market."
A real estate industry report released earlier this week showed that existing home sales, based closed sales rather than signed contracts, slipped slightly last month but remained elevated.
Tuesday, June 22, 2010
Sidewalks, Tree Trimming and Keeping Hancock Park Green and Water Wise
Due to the City of LA’s severe budget problems many services such as tree trimming, stump removal, median/parkway maintenance and sidewalk repair services have been all but eliminated. The City now considers these types of repairs and services to be the responsibility of the homeowner. The responsibility for sidewalk repairs has not yet been settled and many LA citizens are challenging whether this change is legal. The Association is considering plans to help support efforts to trim trees and grass by putting together a fund (using annual dues).
Because of recent, severe droughts, and other state wide water requirements, the times of ample, cheap water for landscaping are over. The Water Efficiency Landscape Ordinance (WELO) and the Low Impact Design Ordinance (LID) were passed in February of this year to further enforce landscape water use reductions. Because of these increasing restrictions on water use for landscaping, the Association has been exploring options for drought tolerant landscaping. At the recent Block Captains’ meeting, landscaper Mayita Dinos gave a talk on water wise plantings for our climate. Los Angeles is considered a Mediterranean climate which means hot, dry summers with little rain, and cool, wet winters. As beautiful as the lawns that surround most Hancock Park homes are these lawns are problematic in our climate. They need a lot of water and their static use compacts the soil. The fertilizer and pesticides that are applied often run off into the storm drain system polluting the Santa Monica Bay. So, consider drought tolerant, waterwise landscaping when planting your garden. The Association is working on more formal recommendations for relandscaping in a waterwise fashion and the information will be posted on our website.
Thanks to the Block Captain Committee for holding a great Block Captains’ meeting in May which highlighted the changes in City Services, landscaping, security and many other important issues for Hancock Park. The Block Captain network is one of the most effective protections against crime. If you want to be a block captain or don’t know who your block captain is contact the Association via the website. And, don’t forget, if you haven’t already, mail in your dues! Your dues support efforts like the tree trimming and grass cutting projects and they let you vote in the election for Board of Directors.
Because of recent, severe droughts, and other state wide water requirements, the times of ample, cheap water for landscaping are over. The Water Efficiency Landscape Ordinance (WELO) and the Low Impact Design Ordinance (LID) were passed in February of this year to further enforce landscape water use reductions. Because of these increasing restrictions on water use for landscaping, the Association has been exploring options for drought tolerant landscaping. At the recent Block Captains’ meeting, landscaper Mayita Dinos gave a talk on water wise plantings for our climate. Los Angeles is considered a Mediterranean climate which means hot, dry summers with little rain, and cool, wet winters. As beautiful as the lawns that surround most Hancock Park homes are these lawns are problematic in our climate. They need a lot of water and their static use compacts the soil. The fertilizer and pesticides that are applied often run off into the storm drain system polluting the Santa Monica Bay. So, consider drought tolerant, waterwise landscaping when planting your garden. The Association is working on more formal recommendations for relandscaping in a waterwise fashion and the information will be posted on our website.
Thanks to the Block Captain Committee for holding a great Block Captains’ meeting in May which highlighted the changes in City Services, landscaping, security and many other important issues for Hancock Park. The Block Captain network is one of the most effective protections against crime. If you want to be a block captain or don’t know who your block captain is contact the Association via the website. And, don’t forget, if you haven’t already, mail in your dues! Your dues support efforts like the tree trimming and grass cutting projects and they let you vote in the election for Board of Directors.
May home sales dip as housing market struggles
WASHINGTON - The housing market may be on the verge of taking another plunge that could weaken the broader economic recovery.
Sales of previously occupied homes dipped in May, even though buyers could receive government tax credits. And nearly a third of sales in May were from foreclosures or other distressed properties. That means home prices could soon be heading down after stabilizing over the past year.
Last month's sales fell 2.2 percent from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal tax incentives is gone entirely, starting next month.
The report is "a worrisome sign for what will occur in July and thereafter when the effect of the tax credit is behind us," said Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York.
Sales have climbed 25 percent from the 4.5 million annual rate they hit in January 2009 — the lowest level of the recession. But they're still down 22 percent from the peak rate of 7.25 million in September 2005.
The report counts home sales once a deal closes. So federal tax credits of up to $8,000 for first-time buyers and up to $6,500 for existing homeowners helped prop up sales in May. The deadline to get a signed sales contract and qualify was April 30. Buyers must close their purchases by June 30.
The tax credits were expected to lift sales in May and June. Lawrence Yun, the Realtors chief economist, said delays in the mortgage-lending process put about 180,000 potential buyers in limbo. They are unlikely to qualify by the June 30 deadline. The trade group is pushing Congress to extend the deadline for closing a sale until Sept. 30.
Real estate agents report a decline in foot traffic, meaning sales could worsen in the coming months.
"The urgency just isn't there," said Pat Lashinksky, CEO of ZipRealty Inc., which has agents in 22 states.
Floyd Scott, broker-owner of Century 21 Arizona-Foothills in Phoenix, said his office had about 25 percent fewer signed contracts to buy homes in May than it did a month earlier.
"The tax credit stopped and boy, I'll tell you, it was like, 'Wait a minute. Is the phone still working?'" Scott said.
Another troubling sign is the number of foreclosures and short sales. Short sales occur when lenders let borrowers sell a home for less than they owe on their mortgage. Together, foreclosures and short sales made up 31 percent of sales in May. And those numbers could rise because the government's efforts to help troubled homeowners keep their homes have had only modest success.
More than a third of the 1.2 million borrowers who have enrolled in the Obama administration's $75 billion mortgage modification program have dropped out. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.
The decline in May home sales reflected a plunge of more than 18 percent in the Northeast. Sales were unchanged in the Midwest but rose nearly 5 percent in the West and 0.5 percent in the South.
The inventory of unsold homes on the market dropped 3.4 percent to 3.9 million. That's an 8.3 month supply at the current sales pace, compared with a healthy level of about six months. The median sales price in May was $179,600, up 2.7 percent from a year earlier.
First-time buyers made up 46 percent of sales.
The report "suggests that even government stimulus in the form of a tax credit isn't enough," to support the U.S. housing market, wrote Guy LeBas, an analyst with Janney Montgomery Scott.
___
AP Real Estate Writer Alex Veiga in Los Angeles contributed to this report.
Source: www.cnbc.com
Sales of previously occupied homes dipped in May, even though buyers could receive government tax credits. And nearly a third of sales in May were from foreclosures or other distressed properties. That means home prices could soon be heading down after stabilizing over the past year.
Last month's sales fell 2.2 percent from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal tax incentives is gone entirely, starting next month.
The report is "a worrisome sign for what will occur in July and thereafter when the effect of the tax credit is behind us," said Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York.
Sales have climbed 25 percent from the 4.5 million annual rate they hit in January 2009 — the lowest level of the recession. But they're still down 22 percent from the peak rate of 7.25 million in September 2005.
The report counts home sales once a deal closes. So federal tax credits of up to $8,000 for first-time buyers and up to $6,500 for existing homeowners helped prop up sales in May. The deadline to get a signed sales contract and qualify was April 30. Buyers must close their purchases by June 30.
The tax credits were expected to lift sales in May and June. Lawrence Yun, the Realtors chief economist, said delays in the mortgage-lending process put about 180,000 potential buyers in limbo. They are unlikely to qualify by the June 30 deadline. The trade group is pushing Congress to extend the deadline for closing a sale until Sept. 30.
Real estate agents report a decline in foot traffic, meaning sales could worsen in the coming months.
"The urgency just isn't there," said Pat Lashinksky, CEO of ZipRealty Inc., which has agents in 22 states.
Floyd Scott, broker-owner of Century 21 Arizona-Foothills in Phoenix, said his office had about 25 percent fewer signed contracts to buy homes in May than it did a month earlier.
"The tax credit stopped and boy, I'll tell you, it was like, 'Wait a minute. Is the phone still working?'" Scott said.
Another troubling sign is the number of foreclosures and short sales. Short sales occur when lenders let borrowers sell a home for less than they owe on their mortgage. Together, foreclosures and short sales made up 31 percent of sales in May. And those numbers could rise because the government's efforts to help troubled homeowners keep their homes have had only modest success.
More than a third of the 1.2 million borrowers who have enrolled in the Obama administration's $75 billion mortgage modification program have dropped out. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.
The decline in May home sales reflected a plunge of more than 18 percent in the Northeast. Sales were unchanged in the Midwest but rose nearly 5 percent in the West and 0.5 percent in the South.
The inventory of unsold homes on the market dropped 3.4 percent to 3.9 million. That's an 8.3 month supply at the current sales pace, compared with a healthy level of about six months. The median sales price in May was $179,600, up 2.7 percent from a year earlier.
First-time buyers made up 46 percent of sales.
The report "suggests that even government stimulus in the form of a tax credit isn't enough," to support the U.S. housing market, wrote Guy LeBas, an analyst with Janney Montgomery Scott.
___
AP Real Estate Writer Alex Veiga in Los Angeles contributed to this report.
Source: www.cnbc.com
Monday, June 21, 2010
California Foreclosure Activity Declines Again
La Jolla, CA.--Lending institutions started formal foreclosure proceedings on fewer California homes last quarter. It is unclear how much of the drop can be attributed to shifts in market conditions, and how much is because of changing policies, a real estate information service reported.
A total of 81,054 Notices of Default ("NODs") were recorded at county recorder offices during the January-to-March period. That was down 4.2 percent from 84,568 for the prior quarter, and down 40.2 percent from 135,431 in first-quarter 2009, according to San Diego-based MDA DataQuick.
The year-ago number is the highest in DataQuick's statistics, which go back to 1992 for NODs. The quarterly average is 44,041, while the low of recent years was 12,417 in third-quarter 2004, when housing market annual appreciation rates were around 20 percent.
"Several factors are at play here and it's hard to know how they play into each other right now. A year-and-a-half ago the subprime loan mess was the black hole. Now, playing catch-up, is the financial distress households are experiencing because of the recession. Add to the mix shifting policy decisions, both by lending institutions and in public policy," said John Walsh, DataQuick president.
"We are seeing signs that the worst may be over in the hard-hit entry-level markets, while problems are slowly spreading to more expensive neighborhoods. We're also seeing some lenders become more accommodating to work-outs or short sales, while others appear to be getting stricter about delinquencies. It's very noisy out there," Walsh said.
The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 47.5 percent of all default activity a year ago. In first-quarter 2010 that fell to 40.9 percent.
California's mid- to high-end housing markets were more likely to have seen a rise in mortgage defaults last quarter, though the concentration of default activity - measured by defaults per 1,000 homes - remained relatively low in those areas.
For example, zip codes statewide with median home sale prices of $500,000-plus saw mortgage defaults buck the overall trend and rise 1.5 percent last quarter compared with the prior quarter, while year-over-year the decline was 19 percent (versus a 40.2 percent marketwide annual decrease). Collectively, these zips saw 4.5 default notices filed for every 1,000 homes in the community, compared with the overall market's rate of 9.3 NODs for every 1,000 homes statewide.
In zip codes with medians below $500,000, mortgage default filings fell 5.8 percent from the prior quarter and declined nearly 43 percent from a year earlier. However, collectively these zips saw 10.5 NODs filed for every 1,000 homes - more than double the default rate for the zips with $500,000-plus medians.
On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the NOD. The borrowers owed a median $14,066 in back payments on a median $330,147 mortgage.
On home equity loans and lines of credit in default, borrowers owed a median $3,897 on a median $64,422 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.
While many of the loans that went into default during first-quarter 2010 were originated in early 2007, the median origination month for last quarter's defaulted loans was July 2006, the same month as during the prior four quarters.
San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.
Although 81,054 default notices were filed last quarter, they involved 79,457 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit). Multiple default recordings on the same home are trending down, DataQuick reported.
Following a historical pattern, mortgages were least likely to go into default in Marin, San Francisco and San Mateo counties. The probability was highest in Merced, Stanislaus and San Joaquin counties.
The number of Trustees Deeds (TDs) recorded, which reflect the number of houses or condo units lost to the foreclosure process, totaled 42,857 during the first quarter. That was down 16.1 percent from 51,060 for the prior quarter, and down 1.7 percent from 43,620 for first-quarter 2009. The all-time peak was 79,511 in third-quarter 2008.
In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The state's all-time low was 637 in the second quarter of 2005, MDA DataQuick reported.
There are 8.5 million houses and condos in California.
On average, homes foreclosed on last quarter spent 7.5 months winding their way through the formal foreclosure process, beginning with an NOD. A year ago it was 6.8 months. The increase could reflect, among other things, lender backlogs and extra time needed to pursue possible loan modifications and short sales.
Foreclosure resales accounted for 42.6 percent of all California resale activity last quarter. It was up from a revised 40.6 percent the prior quarter, and down from 57.8 percent a year ago, the peak. Foreclosure resales varied significantly by county last quarter, from 13.8 percent in San Francisco to 67.7 percent in Merced.
At formal foreclosure auctions last quarter, an estimated 24.6 percent of foreclosed properties went to investors and others who do not appear to be lender or government entities. That's up from an estimated 17.6 percent a year ago.
The lenders that originated the most loans that went into default last quarter were Countrywide (7,282), World Savings (6,459), Washington Mutual (6,371), Wells Fargo (5,204) and Bank of America (3,851). These were also the most active lenders in the second half of 2006, and their default rates were well below 10 percent.
Smaller subprime lenders had far higher default rates for that period: ResMAE Mortgage, Ownit Mortgage, Master Financial, First NLC Financial Services and Fieldstone Mortgage all had default rates of more than 65 percent of the loans they originated in the second half of 2006. These and most other subprime lenders are long gone.
Most of the loans made in 2006 are owned or serviced by institutions other than those that made the loans. The servicers pursuing the highest number of defaults last quarter were ReconTrust Co., Cal-Western Reconveyance and NDEx West, MDA DataQuick reported.
Source: DataQuick Information Systems
Media calls: Andrew LePage (916) 456-7157 or John Karevoll (909) 867-9534
Copyright 2010 DataQuick Information Systems. All rights reserved.
A total of 81,054 Notices of Default ("NODs") were recorded at county recorder offices during the January-to-March period. That was down 4.2 percent from 84,568 for the prior quarter, and down 40.2 percent from 135,431 in first-quarter 2009, according to San Diego-based MDA DataQuick.
The year-ago number is the highest in DataQuick's statistics, which go back to 1992 for NODs. The quarterly average is 44,041, while the low of recent years was 12,417 in third-quarter 2004, when housing market annual appreciation rates were around 20 percent.
"Several factors are at play here and it's hard to know how they play into each other right now. A year-and-a-half ago the subprime loan mess was the black hole. Now, playing catch-up, is the financial distress households are experiencing because of the recession. Add to the mix shifting policy decisions, both by lending institutions and in public policy," said John Walsh, DataQuick president.
"We are seeing signs that the worst may be over in the hard-hit entry-level markets, while problems are slowly spreading to more expensive neighborhoods. We're also seeing some lenders become more accommodating to work-outs or short sales, while others appear to be getting stricter about delinquencies. It's very noisy out there," Walsh said.
The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 47.5 percent of all default activity a year ago. In first-quarter 2010 that fell to 40.9 percent.
California's mid- to high-end housing markets were more likely to have seen a rise in mortgage defaults last quarter, though the concentration of default activity - measured by defaults per 1,000 homes - remained relatively low in those areas.
For example, zip codes statewide with median home sale prices of $500,000-plus saw mortgage defaults buck the overall trend and rise 1.5 percent last quarter compared with the prior quarter, while year-over-year the decline was 19 percent (versus a 40.2 percent marketwide annual decrease). Collectively, these zips saw 4.5 default notices filed for every 1,000 homes in the community, compared with the overall market's rate of 9.3 NODs for every 1,000 homes statewide.
In zip codes with medians below $500,000, mortgage default filings fell 5.8 percent from the prior quarter and declined nearly 43 percent from a year earlier. However, collectively these zips saw 10.5 NODs filed for every 1,000 homes - more than double the default rate for the zips with $500,000-plus medians.
On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the NOD. The borrowers owed a median $14,066 in back payments on a median $330,147 mortgage.
On home equity loans and lines of credit in default, borrowers owed a median $3,897 on a median $64,422 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.
While many of the loans that went into default during first-quarter 2010 were originated in early 2007, the median origination month for last quarter's defaulted loans was July 2006, the same month as during the prior four quarters.
San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.
Although 81,054 default notices were filed last quarter, they involved 79,457 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit). Multiple default recordings on the same home are trending down, DataQuick reported.
Following a historical pattern, mortgages were least likely to go into default in Marin, San Francisco and San Mateo counties. The probability was highest in Merced, Stanislaus and San Joaquin counties.
The number of Trustees Deeds (TDs) recorded, which reflect the number of houses or condo units lost to the foreclosure process, totaled 42,857 during the first quarter. That was down 16.1 percent from 51,060 for the prior quarter, and down 1.7 percent from 43,620 for first-quarter 2009. The all-time peak was 79,511 in third-quarter 2008.
In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The state's all-time low was 637 in the second quarter of 2005, MDA DataQuick reported.
There are 8.5 million houses and condos in California.
On average, homes foreclosed on last quarter spent 7.5 months winding their way through the formal foreclosure process, beginning with an NOD. A year ago it was 6.8 months. The increase could reflect, among other things, lender backlogs and extra time needed to pursue possible loan modifications and short sales.
Foreclosure resales accounted for 42.6 percent of all California resale activity last quarter. It was up from a revised 40.6 percent the prior quarter, and down from 57.8 percent a year ago, the peak. Foreclosure resales varied significantly by county last quarter, from 13.8 percent in San Francisco to 67.7 percent in Merced.
At formal foreclosure auctions last quarter, an estimated 24.6 percent of foreclosed properties went to investors and others who do not appear to be lender or government entities. That's up from an estimated 17.6 percent a year ago.
The lenders that originated the most loans that went into default last quarter were Countrywide (7,282), World Savings (6,459), Washington Mutual (6,371), Wells Fargo (5,204) and Bank of America (3,851). These were also the most active lenders in the second half of 2006, and their default rates were well below 10 percent.
Smaller subprime lenders had far higher default rates for that period: ResMAE Mortgage, Ownit Mortgage, Master Financial, First NLC Financial Services and Fieldstone Mortgage all had default rates of more than 65 percent of the loans they originated in the second half of 2006. These and most other subprime lenders are long gone.
Most of the loans made in 2006 are owned or serviced by institutions other than those that made the loans. The servicers pursuing the highest number of defaults last quarter were ReconTrust Co., Cal-Western Reconveyance and NDEx West, MDA DataQuick reported.
Source: DataQuick Information Systems
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