California and Northern San Diego Housing Update
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Presentation to Northern San Diego CAR Group April 23, 2012
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California and Northern San Diego Housing Update
- 1. California and San Diego Market Update Presented by Madeline Schnapp Director of Economic Research, ForeclosureRadar How to Understand (and leverage) Market Conditions Today
- 2. Agenda • California and San Diego Market Update • Housing Market Recovery? • 2013 Forecast • Introducing PropertyRadar
- 3. Inventory at or near record lows 0 2 4 6 8 10 12 14 16 18 20 MonthsofUnsoldInventory California Unsold Inventory Index Months of Available Inventory - January 1990 to February 2013 Source: California Association of Realtors – CAR.org
- 4. Prices up sharply in 2012 Source: California Association of Realtors – www.car.org $150,000 $250,000 $350,000 $450,000 $550,000 $650,000 MedianHomePrices($) Median Home Prices - California and San Diego County January 1990 through January 2013 California San Diego Prices Begin to Rise
- 6. 0 10,000 20,000 30,000 40,000 50,000 60,000 NumberofNoticesorSales California Foreclosure Activity September 2006 through March 2013 Notice of Default Notice of Trustee Sale Foreclosure Sales Source: ForeclosureRadar – www.foreclosureradar.com Foreclosure activity slowing…
- 7. 7 Foreclosure activity slowing… 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 No.ofNoticesorSales Foreclosure Activity - San Diego County September 2006 through March 2013 Notice of Default Notice of Trustee Sale Foreclosure Sales
- 8. Number of days to foreclose explodes
- 9. 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
- 10. Foreclosures will be with us for awhile ~10 Million Homes 6.3 Million Mortgages 1.7 Million Underwater 380,000 Delinquent 95,000 in Foreclosure 58,000 Bank Owned 15,000 Distressed Sales 533k / 15,000 = ~36 Months
- 11. Shadow inventory real but no wave ~10 Million Homes 6.3 Million Mortgages 1.7 Million Underwater 380,000 Delinquent 95,000 in Foreclosure 58,000 Bank Owned 15,000 Distressed Sales ~ 1.75M /15,000 = ~ 10 Years
- 13. Housing Recovery Dependent on Jobs and Income Rising Employment Rising Incomes
- 14. California employment on the rise
- 15. San Diego County Employment (40,000) (30,000) (20,000) (10,000) - 10,000 20,000 30,000 40,000 NumberofJobs San Diego County Employment Growth March 2005 through March 2013
- 16. California personal income gaining ground $120,000 $130,000 $140,000 $150,000 $160,000 $170,000 $180,000 Income(Millionsof$) California Personal Income (Millions of Dollars) Q1 2000 through Q3 2012
- 17. What does a housing recovery look like? Rising Prices Increase in Market Activity Increase in Building Activity
- 18. Market Activity Slows… 0 10,000 20,000 30,000 40,000 50,000 60,000 SalesVolume Monthly Trend of California Real Estate Sales Distressed vs. Equity Sales January 2006 through March 2013 Distressed Sales Non-Distressed Sales Q1 2013 sales
- 19. Distressed Property Sales Decline in Q1 2013 35% 40% 45% 50% 55% 60% 65% 70% Distressed Property Sales - % of Total Sales January 2012 to March 2013
- 20. Market Activity Slows 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 SalesVolume California Real Estate Sales Non-Distressed v. Distressed (Short Sales and Bank REO Resales) Short Sale Bank REO Resale Non-Distressed Sale
- 21. ….But Not in San Diego County 3,000 3,750 4,500 5,250 6,000 6,750 7,500 8,250 9,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 SalesVolume SalesVolume Total Q1 Sales Comparison - California, San Diego County Q1 2002 to Q1 2013 Total California Sales Total San Diego Sales
- 22. Cash Sales Now 30% of Total Sales 0% 5% 10% 15% 20% 25% 30% 35% 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 %ofTotalSales SalesVolume Cash Sales, Volume and % of Total Sales 2001 through 2013 YTD Cash Sales Cash Sales as % of Total Sales Cash sales through March 2013
- 23. California home building permits on the rise
- 24. Negative Equity on the Decline Homeowner equity critical to housing recovery
- 25. Home equity slowly improving 35% 45% 55% 65% MortgageDebt-to-ValueRatio(%) Annual Trends of Mortgage Debt-to-Value Ratio (%) 1995 to 2012
- 26. Negative equity on the decline Source: CoreLogic – www.corelogic.com 24% 28% 32% 36% NegativeEquityShare(%) California Negative Equity (%) Q4 2009 to Q4 2012
- 27. Negative Equity - 200 400 600 800 1,000 1,200 1,400 NumberofHomeowners(inThousands) Equity California Homeowner Equity, March 2013 5.3 million homeowners have 5% or more equity in their properties
- 28. Negative Equity 0 200 400 600 800 1,000 5% 10% 15% 20% 25% NumberofCaliforniaHomeowners (inThousands) Increase In California Home Prices Number of California Homeowners that Exit Negative Equity Positions if Home Prices Increase by Certain Amounts
- 29. 2013 Forecast
- 30. 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
- 31. 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
- 32. 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
- 33. 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
- 34. Putting your head in the sand is not going to find you inventory
- 35. Farming for Inventory – A Story
- 37. 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
- 38. Driving a Neighborhood with a Client Expertise at your Fingertips!
- 39. Driving with a client, they are interested in this home
- 40. Explore Mode
- 42. Get a Broader View of Neighborhood
- 43. Are Many People Underwater?
- 44. Explore Mode
- 45. Are there Lots of Foreclosures?
- 46. How Stable is the Neighborhood?
- 47. Show the Aerial View, Property Type, Est. Value, and much more!
- 48. Property Search Access to over 100 Search Criteria!
- 49. Farm For Near Negative Equity Homeowners that have Lived in their Homes for 8 or More Years.
- 52. 3 Bedrooms
- 53. With the Value You Want
- 54. Find Near Negative Equity Properties
- 55. That are not the Primary Residence
- 56. Search Results
- 57. Search Out the Owner $550,000
- 58. Owner in Linked in
- 59. – Farm for short sale opportunities – Locate and mail to renters who may eventually become buyers Other opportunities to find inventory
- 60. San Diego County Comeback
- 66. 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!
- 67. Thank You! FREE 3-Day Trial www.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: Support@Foreclosureradar.com
Editor's Notes
- Starts peaked at almost 60k, now 10k (1/6)Sales peaked at almost 30k, now 6k (1/5)
- Starts peaked at almost 60k, now 10k (1/6)Sales peaked at almost 30k, now 6k (1/5)
- If we just listen to the fear in the headlines and bury our heads in the sand, we lose out on a good 2 to maybe 3 year runway.
- Constraining Demand:Homeowners with equity not moving up, instead hunkering downNearly a quarter of all homeowners underwater, condemned to a prison of debt.Mortgage lending standards remain tight.
- If we just listen to the fear in the headlines and bury our heads in the sand, we lose out on a good 2 to maybe 3 year runway.
- If we just listen to the fear in the headlines and bury our heads in the sand, we lose out on a good 2 to maybe 3 year runway.
- Love your long-term vision intro that you did last week! Tie to it with the importance of using data to find the right opportunities now.
- You know this case study! A client is interested in 1,700 sq. foot single story ranch style home. You drive by this home and wonder about its status…..
- Highlight multipolygon
- 350k -650k
- -20 to 5
- Let’s further narrow down by looking at properties that are not claimed as primary residences on the owners taxes. We could have a greater chance of these owners selling since they are most likely a rental or a second home.