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In October, asking home prices increased 0.6 percent month-over-month (M-o-M), the second-slowest monthly gain in seven months. This continued slowdown in asking prices is largely due to expanding inventory, rising mortgage rates, and declining investor activity. Asking prices could potentially slow further if consumer confidence suffers from the ongoing budget uncertainty and future shutdown and debt-default worries. Nevertheless, the monthly, quarterly, and yearly gains are all still high compared with historical norms. In fact, asking prices rose 11.7 percent year-over-year (Y-o-Y) – the highest increase since the housing bubble burst.

Source Truila

Antelope Valley Median Home Price History -Data provided by Zillow.com 

Palmdale

- $370,000, peak in 2006

- $137,000, cycle low in Feb 2012

- $168,000, July 2013

- $172,500, August 2013 (+23.1% yr over yr)

Lancaster

- $342,000, peak in 2006

- $124,000, cycle low Feb 2012

- $153,500, July 2013

- $157,800, August 2013 (+24.4% yr over yr)

 As you can see, Antelope Valley homes are not even at ½ of their median price peak from 2006.  This tells me that this market still has plenty of room for an upside move, and with it, land prices as well. 

 

Existing Home Market as Reported by GAVAR

- in August, 456 existing homes were sold vs July’s 442, a gain of +3.1%

- Versus August of 2012, sales down though about -14%

- Year to date, through August 31, sales are down -12% vs the same period in 2012

- the average price of a home sold in August was $189,988, +29% vs August of 2012

- the average selling price of an AV home the first 8 months of 2013 is $172,543, up

  +23% vs the first 8 months of 2012

- foreclosures were just 8% of all sales in August

- short sales were 20% of all sales in Aug

- over the past year astounding improvement has been made in the distress

  portion of the AV home market.  In Aug 2012, foreclosures made up 47% of

  all sales and short sales 27.6%

Comment- sales are still being retarded by low inventory, leading to poor selection. 

This bodes well for the new home market once it gets up and running again.

 

Palmdale / Lancaster REO Inventory

In August………………….

Palmdale-  875 homes were in default, foreclosure, or were bank owned (REO)

REO’s versus prior month:  down - 26 homes / - 2.8%      

REO’s year over year change, - 1,229 homes / - 58.4%   

Notice of Defaults filed, year over year change,  - 57%             

Time needed to sell off all foreclosures: existing REO supply / year over year change = 8.5 months  

 

Lancaster- 962 homes were in default, in foreclosure, or were bank owned (REO)        

REO’s versus prior month:  + 37 homes, + 4.0%       

REO’s year over year change, - 932 homes, - 49%   

Notice of Defaults filed, year over year change, - 48%                

Time needed to sell off all foreclosures:  existing REO supply / year over year change = 12 months     

 

REO Supply:  Palmdale & Lancaster Collectively

- month over month change, + 11 homes

- existing REO supply versus last month: + .6%  

- year over year change, - 2,161 homes

- percentage change year over year, -54%

- total number of REO homes remaining, 1,837        

- existing supply of REO’s / distress sales, 10 months   

 

Comment:  The decline of AV REO’s in August took a rest and flattened out, rising a total

of 11 homes in both cities collectively.  Year over year, the trend of falling REO’s is still

well in place.  As expressed in time, the supply of REO’s rose slightly, from 8 months to 10.

All trends stair step their way up or down, backing and filling along the way.  The July decline

in REO’s was very strong, down 345 homes.  Statistically, after such a sharp move like that,

it is not unusual to see the succeeding month flatten out as the previous month needs to be

digested before the trend resumes.  It is highly probable, that one year from now, REO’s will

no longer be a factor in the existing home market.   If so, that is great news for the new home

market and for land prices.  

October 2013 U.S. Economic and Housing Market Outlook

MCLEAN, VA--(Marketwired - Oct 22, 2013) - Freddie Mac (OTCQB: FMCC) released today its U.S. Economic and Housing Market Outlook for October showing that the federal government shutdown, debt ceiling issues, and the slowing economy -- including the severely depressed level of new home construction -- are slowing the housing recovery heading into the fourth quarter of the year. A short preview video and the complete October 2013 U.S. Economic and Housing Market Outlook are available here.

Outlook Highlights

• By the end of the year, expect mortgage rates to be around the 4.3 percent level, and head higher in 2014. 
• Due to the government shutdown, we've revised down fourth quarter growth projections by 0.5 percent.
• Inventories remain tight at a 5 months' supply as of September due to negative equity, a declining supply of distressed sales, and a severely depressed level of new construction.
• Expect the U.S. economy to add less than 1 million housing units in 2013 and around 1.15 million in 2014, significantly below normal levels.
• Construction employment is 1 to 2 million jobs below trend levels, which is roughly 1 year of non-farm payroll growth at current levels.
• Expect the ramping up of residential construction to take a while, and while economic growth will improve over the next year, the economy won't be operating at full potential until sometime after 2015.

QuoteAttributed to Frank Nothaft, Freddie Mac vice president and chief economist.

"The housing recovery keeps chugging along despite a constant barrage of disruptions to the broader economy. We're likely going to see the housing recovery slow down, but not shut down, as we close out the rest of this year due to tight inventories in many markets, rising mortgage rates and slumping consumer confidence. Fortunately, the housing recovery should continue to absorb the economic shocks in stride and improve next year."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. For more information please visit www.FreddieMac.com. Twitter: @FreddieMac

 

Shadow Inventory - 1.9 Million Homes

Corelogic, which tracks and analyzes foreclosure data nationwide just reported some staggering REO statistics.  The Shadow Inventory, which is defined as REOs which have not yet been assigned to agents to put on the open market, represents 1.9 Million homes nationwide with a value of $293 Billion.

If you would like more information Please contact us.  

Thanks Danny & Karie Levine

661-810-2162 or 661-810-2163

Kariedan@AVHomes.net

Antelope Valley Existing Home Market as Reported by GAVAR

- The AV home market remains a familiar story: tight supply, leading to higher prices as a surplus of buyers chase a limited inventory

- AV home sales in Junewere down due to a lack of inventory, down -19% year over year

- Year to date through June 30, AV home sales are down -12% vs the same period in 2012

- AV home prices were up +32% vs June 2012

- The median price of a AV home in June was $141,217

- The median price of an AV home during the first 6 mo of 2012 was $137,702, a +21% increase vs the same period in 2012

- As mentioned above, sales are slower vs June 2012, down -19%

- Year to date, through June 30th, home sales are down -12% vs 2012

-Short sales represented 22%of all the market while foreclosures were down to 11%

- This means that distress sales still represent 1/3 of all houses for sale- improving but still too high

- 36% of all transactions were all cash sales in June

Are AV home prices forming a new bubble? Answer: No, AV home prices are still well below the cost of construction and their price highs of 2007. AND more importantly, AV home prices are not beyond current and rising incomes. When home price move well beyond what incomes can afford, that is when a bubble forms. We are nowhere near that point.

Comment- rising home prices will diminish all cash buyers. All cash buyers, nationally, peaked at 40% two years ago. For home sales to hold up next year, the market will need more traditional and new home buyers to replace the all cash buyers that are in the process of dropping out. While housing is still a good value, it is quite a bit less so versus 1 or 2 years ago. Most of the cash buyers were pure value investors and content to collect rents while waiting for home values to come back.

Antelope Valley Median Home Prices

June sales activity by zip code: Source: Redfin

93510- Acton

current: $410,000

units sold: 13

price per sq foot: $189

price change y/y: +14%

 

93552- East Palmdale

current: $175,000

units sold: 37

price per sq foot: $84

price change y/y: +17%

 

93550- Mid Palmdale

current: $150,000

units sold: 50

price per sq foot: $101

price change y/y: +30%

 

93551- West Palmdale / Quartz Hill

current: $265,000

units sold: 60

price per sq foot: $113

price change y/y: + 38%

 

93536- West Lancaster / Quartz Hill

current: $220,000

units sold: 72

price per sq foot: $97

price change y/y: +23%

 

93534- Mid Lancaster

current: $106,000

units sold: 23

price per sq foot: $87

price change y/y: +22%

 

93535- East Lancaster

current: $140,000

units sold: 51

price per sq foot: $87

price change y/y: +40%

 

93591- Lake Los Angeles

current: $95,000

units sold: 6

price per sq foot: $66

price change y/y: +57%

 

Palmdale / Lancaster REO Inventory

This is THE most important category to track in regard to the progress of the recovery of the housing recovery.

In June........

Palmdale-1,173 homes were in default, in foreclosure, or were bank owned (REO)

REO's versus prior month: up +17 homes / +1.4%

REO's year over year change, - 1,060 homes / - 47%

Notice of Defaults filed, year over year change, - 47%

Time needed to sell off all foreclosures: existing REO supply / year over year change = 13 + months

 

Lancaster-998 homes were in default, in foreclosure, or were bank owned (REO)

REO's versus prior month: - 58 homes, - 5.4%

REO's year over year change, - 1,064 homes, - 51.6%

Notice of Defaults filed, year over year change, -66.8%

Time needed to sell off all foreclosures: existing REO supply / year over year change = 11 months

 

REO Supply: Palmdale & Lancaster Collectively

- Month over month change, - 41 homes

- Year over year change, - 2,124 homes

- Total number of REO homes, 2,171

- Existing supply of REO's / distress sales, 12 months

- Existing REO supply versus last month:- 1.85%

 

Comment: Lancaster and Palmdale, collectively, have been around a 12 month supply for several months now. Considering the move up in mortgage rates, this is not too surprising. If the next 12 months draws down the foreclosures at anywhere near the prior 12 month pace, we will be at historically normal foreclosure levels. If that happens, I would expect most AV homes to be back at or near "cost", meaning their market value would be at or near the cost to build it.  When that happens, that puts the new construction home market back in business.

Information  provided by Frank Donato of First American Title

Interest Rates At A Low

Below are the facts about 90 day flip rules. Many investors buying, rehabbing then reslling a home need to understand these rules.  This information was provided by Joseph Fernando of Performance Mortgage. 

Antelope Valley Existing Home Market

- June existing home sales (495) fell -10.6% vs. June of 2011

- the average selling price in June though was up +3% ($141,282) vs. June of 2011

- 40% of all sales in June were foreclosures, with 30% being short sales

- this means that 70% of all sales were some type of distressed sale- not good

- residential agents say that sales fell due to a shrinking inventory as the number

  of available home listings in GAVAR is down 50% vs. one year ago

- agents also say the banks are slowing down in their processing of short sales

  and foreclosures

- inventory is also being held back by the loan modification process as some

  homeowners wish to go that route first before deciding to sell

- inventory is so thin that buyer fatigue is now common; some buyer have

  made 10-20 offers with no acceptance

- buyers making repeated offers on different homes are getting beat out

  by investors with cash, making the escrow quicker and easier, as no loan

  qualification process or appraisal is needed.

- one particular buyer has made 28 offers and failed to get acceptance on all 28

 

Some agents dont know what to suggest to get there buyers offer accepted.  If you are willing to listen to our suggestions, We can help you get your offer accepted without writing so many offers.

Fannie, Freddie won't be reducing mortgage principal < click here

 

Fannie Mae and Freddie Mac's regulator will not permit principal reduction, but Treasury Secretary Tim Geithner says it could save taxpayers $1 billion. More

 

   The Federal Housing Finance Agency said its analysis found that principal reduction does not prevent foreclosures while saving taxpayers money.

"FHFA has concluded that the anticipated benefits do not outweigh the costs and risks," said Edward DeMarco, the agency's acting director, who has steadfastly resisted calls to implement the loan modification technique.

 

Treasury Secretary Tim Geithner, however, is not taking no for an answer. He quickly shot off an eight-page letter to DeMarco urging him to change his mind. In it, Geithner argued that allowing principal reduction would ultimately save taxpayers as much as $1 billion.

"I do not believe it is the best decision for the country," Geithner wrote. "You have the power to help more struggling homeowners and help heal the remaining damage from the housing crisis."

April summary:  The longer term trend is still down, as year over year inventory is down about 14% for both cities combined.  However, in the near term (April), inventories rose in both cities by an average of about +6%.  If we look at the longer term trend, which was down 15% over the past year, and assuming that 15% decline in inventory annually, it will take 5-6 years to reduce the inventory to historically normal levels.  It would be at that point that homes would once again sell on normal supply and demand basis.  Of course, if home sales improve, that 5-6 years could be brought down.  The issue though is two-fold; at what pace will homes sell in the coming months, and how many more homes will become REOs, increasing supply.  The two forces of supply and demand have been battling it out since the crisis began, and thus far, the supply of REOs has been building up faster than the market can resell them.  Perhaps if banks would release more supply onto the market, instead of holding them back, we could come to a faster resolution. 

** Please note Traditional Sales includes Flipping Properties no way to separate.

  Here is the problem:  only 23% of all sales in the AV are traditional, and even those are at greatly depressed prices.  Low valuations on homes have the trade up or trade out market locked up.  Capital in the form of equity cannot move.

Existing Home Market:  In April, median home prices finished as follows:

- Palmdale, $144,500 vs. $143,000 in April 2010

- Lancaster, $140,000 vs. $125,000 in April 2010

- Littlerock, $123,000 vs. $98,000 in April 2010

- Pearblossom, $85,000 vs. $55,000 in April 2010

- Rosamond, $111,000 vs. $107,500 in April 2010

- California City, $65,000, no change

Antelope Valley Existing Home News   
Information from SOCAL&GAVAR

Foreclosure Inventory 

Here are the most recent foreclosure supply numbers.  The below numbers represent current and future supply of distress home sales.  It is these homes that have depressed market values and have caused the current market weakness.  Home values, and the real estate market in general, cannot rebound and trend upward until this group of homes is reduced to its historical norm.  For this reason, this is THE most important category to track in regard to the progress of the recovery.

Palmdale- 3,429 homes in, or about to go into foreclosure, or bank owned      April versus prior month:  up +175 homes or  +5.37%         April 2011 vs. April 2010:  down -516 homes or  -13.07%  

 April:  released 5-17-11

Lancaster- 3,123 homes are in, or are about to go into foreclosure, or bank owned   April versus prior month:  up + 221 + 7.61%.    April 2011 vs. April 2011:  down 576 homes or -15.57%. 

April:  released 5-17-11

See Part 2 for Summary