Alameda Real Estate: Odds, Ends and Inventory

Just a quick post today. The Alameda home inventory is down from the prior two weeks, and if you look at the chart below you can see the steep decline since July. If this was a ski slope it would be a lots of fun, but this line just makes the market sluggish.



The market add three new foreclosures this past week and you can see that distressed properties make up almost 30 percent of the Island's inventory. Distressed properties have made up 25 percent of the market since November. I think that this trend is going to continue most of this year.




The inventory for week shows that single family residence are still below 60 units. Of the 56 units for sale 16 of those properties are either a short sale or foreclosure; this is 29 percent of the inventory. If you are looking on Bay Farm the inventory 25 units, so buyers do not have much selection.

I would expect a bit of a sales run as the Federal Tax Credit comes to a close in April (buyers need to be in contract by April 30, 2010) on lower end properties that would fit the income limits for buyers. Until the market gains new inventory prices will be low and sales will be slow.

Alameda Inventory: February 12, 2010

. . 2/15/2010 . Total 109 . 94501 84 . 94502 25 . SFR 56 . Condo 32 . Multi-Family 19 . Short Sale 18 . Foreclosure 14 . Price Reductions 32 . High List $1,999,000 . Low List $199,900 .

Alameda Landmark Now A Short Sale

Sorry about the lack of posts last week, but have been under the weather and did not feel much like writing.

Here is today's home inventory for Alameda and the data shows a nice upswing in inventory this week. In total the Island is up 11 more units than last week, but there is a concerning underlying element in the numbers that is cause for concern.

Five of the 11 units for sale are distressed properties; our of the properties are short sales. If this trend holds it is a sign that people are continuing to struggle with their mortgages and can not hold on at the current rate.

Three of the four short sale listings add this week were townhome/condos. The only exception is The Webster House at 1238 Versailles Avenue. Built in 1854 this is a City landmark and now a victim of the housing downturn. According to the listing comment it is a: Historical gem currently used as a bed & breakfast & tea house (business being sold separately). Fully remodeled w/ commercial kitchen & charming touches throughout. Large grounds, set far back from the street w/ great curb appeal.

Distressed properties are 35 percent of Alameda's inventory. Inventory growth is a good thing given the City has less than three months of it, but at the cost of others losing their property this can have other social impact.

Alameda Inventory -- February 1, 2010

. . 2/1/2010 . Total 104 . 94501 82 . 94502 22 . SFR 54 . Condo 29 . Multi-Family 19 . Short Sale 19 . Foreclosure 10 . Price Reductions 28 . High List $1,999,000 . Low List $188,000 .

Alameda Inventory Continues to Stay Flat

I have not been posting the past few days because I have been attending the National Association of Realtors Expo in San Diego. Today is the final day of the gathering and I will be heading back home later today.

It has been good to get the pulse of those who work in the industry everyday, but the jammed pack days have kept me away from my duties of keeping up with our local market.

Over the past nine weeks inventory has been flat ranging between 122 and 135 units for sale. This week inventory stayed in this range at 125 units, but there was a visible increase in distressed properties. In terms of total inventory distressed properties account for 37 percent of the unit, this was a four percent increase from the prior week.


Link to Larger Chart

The raw numbers are not huge with four new foreclosures and on additional short sale added to the market over the past week. Looking at data from RealtyTrac it hows that the island has 101 properties in pre-foreclosure, 64 ready for auction and 84 banked owned. That 84 number is the one that concerns me, not knowing when or if these will be release into the market could add pressure to an already fragile market.

Below is the inventory for the week.

. . 11/16/2009 . Total 125 . 94501 98 . 94502 27 . SFR 75 . Condo 27 . Multi-Family 21 . Short Sale 21 . Foreclosure 15 . Price Reductions 46 . High List $1,899,000 . Low List $149,000 .

A 40 Percent Rise in Alameda Foreclosures

Last week, Alameda saw a rise in foreclosures listed on the Multiple Listing Service (MLS) after nearly three weeks of no inventory being added to this segment of the market.

The market added five foreclosed listings in five days. The newly listed properties are all single family residences and range from $422,500 to $589,900.

The properties are:

• 1427 Bay Street -- a two bedroom, one bathroom home listed for $424,800
• 1549 Bay Street -- a four bedroom, two plus bathroom home listed for $424,800
• 1528 Pacific -- a two bedroom, one bathroom home listed for $422,500
• 1009 Central -- a four bedroom, two bathroom home listed for $460,750
• 3246 Garfield -- a three bedroom, two bathroom home listed for $589,900

The increase from last weeks nine properties to today's 15 is a 40 percent increase. This is a big swing in the number and is very concerning. I wrote about Shadow Inventory back in May and was concerned that a large number of foreclosures may hit the Alameda market.

Back in May we saw: RealtyTrac, a search of foreclosures for Alameda show that there is a looming group of homes ready to hit the Island’s Real Estate market. The Website list 93 homes in Pre-foreclosure. The owners have received notice of default, but have not yet been foreclosed. The Pre-foreclosed homes is more than half of what is currently listed on the Multiple Listing Service (MLS). Add to that 53 listed for Auction and another 75 Banked-Owned and that is 221 properties that could add to the rise in inventory.

Today the Island has seen a decline in inventory, but the RealtyTrac numbers continue a significant number of homes in distress.

The Website list 98 homes in Pre-foreclosure and increase from May. Those 98 homes in pre-forclosure are families that are behind on their payments and give the job market many people may continue to struggle to pay. Add to that 71 listed for Auction and another 85 Banked-Owned and that is 254 properties in total. So over the course of the main home selling season we have seen a 13 percent increase in distressed homes.

Not sure what this means in the short term, but my guess is that it will continue to put pressure on home prices, driving them down, until banks clear these properties from their books. The numbers also show that Alameda home owners are having a tough time paying the mortagage.

Alameda Inventory -- Week of September 21

. . . 9/21/2009 . Total 135 . 94501 111 . 94502 24 . SFR 91 . Condo 24 . Multi-Family 18 . Short Sale 11 . Foreclosure 15 . Price Reductions $47 . High List $1,899,000 . Low List $229000 .

Stress or Distressed

Just adding to yesterday's post about shadow inventory. I wanted to provide a chart that shows both foreclosures and short sales listed on the Multiple Listing Service (MLS). These are Alameda properties that have been placed on the open market for sale.

You can see that distressed properties have declined since a high in January. The combined foreclosure and short sales for the week were 29. In terms of listed foreclosures, on May 17, we saw a 26-week low of just eight listed. The high was back in November when the Alameda market had 17 foreclosures on the market.

Given that RealtyTrac is reporting 93 homes in pre-foreclosure, 53 at the auction stage and 75 banked owned it appears that the MLS is under-reporting.

Link to Larger Chart

California Weak and High

Two new reports on the California Real Estate market came out today that details that the market as still very tenuous. New home sales suffered a sharp decline from the prior year and foreclosure filings hit new highs

According to the California Building Industry Association, February sales of new homes in California were down 54 percent from a year ago. This is a modest improvement from the prior month but still a very weak. Sales of single-family homes and townhomes were both down 55 percent from a year ago, while sales of condominiums were off 51 percent.

Not only are sales down but the median base price was also down 15 percent from a year ago and 6 percent from January.

News regarding distressed properties was no better. According to RealtyTrac foreclosure-related filings on U.S. homes during the first three months of the year were up 9 percent from the previous quarter and 24 percent from a year ago, surpassing previous highs for the current downturn.

The 803,489 properties subject to some kind of foreclosure filing during the first quarter -- including default notices, auction sale notices and bank repossessions -- marked a record high since RealtyTrac began reporting in January 2005.

The increase in filings can be attributed to legislative action. Many Banks/Lenders have been holding off on foreclosures because of moratoria and legislative delays. With these programs coming to an end these initiate new foreclosure proceedings.

In Alameda, foreclosures that have reach the MLS have been relatively very few. In fact we peaked in November of last year and have reached a 21 week low for foreclosed homes for sale. That number appears to be understated, according to RealtyTrac Alameda has 92 properties in Pre-Foreclosure, 37 Trustee Sales and 73 Bank Owned.

The 73 Banked owned is troublesome, it means that they, the Banks, are sitting on inventory and the 92 properties that have now entered some face of the foreclosure process means that the Island could see it own wave of distressed properties hit the market in the near future.

Demand for distressed properties by first-time homebuyers and investors has picked up in some hard-hit markets, locally in East Contra Costa County, but given the new news there is a new swell of properties entering the pipeline.

California, Florida, Arizona, Nevada and Illinois accounted for nearly 60 percent of properties subject to foreclosure-related filings during the first quarter, RealtyTrac said. California alone accounted for 29 percent of the properties in some stage of foreclosure -- 230,915 -- a 35 percent increase from the previous quarter, and the highest total seen in the four years RealtyTrac has been issuing reports.

The California State tax credit for new homes purchases in demand with first time homebuyers flocking to the program. The California Franchise Tax Board said it had received more than 3,100 applications for the tax credit, which is available to qualified buyers making purchases during the year beginning March 1, 2009, or until the $100 million allocated for the program runs out. Applications for $30.6 million in tax credits, or nearly one-third of the program's capacity, have been received so far.

The Short of It

For the past 18-months foreclosed properties have gotten all the attention, but they are only one half of the distressed property inventory. The more likely encounter an Alameda Buyer will have is with a short sale. There are four times as many shot sales in Alameda as foreclosures, so I thought it would be a good topic to give a little more information.

Distress Properties come in two types of transactions: short sales and foreclosures. There are some differences between theses two types of properties transactions, but both require a lot of patience from the buyer, because the real estate transaction now has a bank included in the mix.

A short sale is when a homeowner is behind on his or her mortgage, or already in default, but has not yet been foreclosed on. The owner of the home works with the lender to sell the home for an amount less than what they currently owe on the property. A short sale usually occurs when the homeowner either knows they can no longer afford the home and is facing a default on the mortgage, or has already defaulted and is facing a foreclosure.

The bank is willing to sell the home for less to avoid the costly default process, so a short sale will happen when a property is sold for an amount that is less than, or “short” of, the current pay-off amount of the mortgage.

So if you are interested in these types of transaction here are a couple of things you need to know before making an offer on a “short sale,”

• Any offer must be approved by seller’s lender and this can be a long, long wait. It is not unheard of offers sitting for two months without a response.
  
• Because of the required approval process by the lender, closings on a short sale are often delayed by several weeks, if not months.
  
• A lender may not agree to, and thus change, the terms of the agreement made between the seller and the buyer.
  
• Lenders are overwhelmed in this market, so expect the process of buying a short sale or an REO to take several months (after you make an offer).
  
• Multiple offers are often made on one property because of the low prices. Even if your offer is competitive, if lender receives what they perceive to be a “better” offer, you could be out of the running all together.
  
• Always remember: until your offer is accepted by the lender, there is no contract. That means even if your short sale offer has been “accepted” by the seller, there is still no contract until the lender has given its approval.
  

So, if you’re the kind of buyer who is not in a hurry to purchase your next home or is comfortable with some uncertainty about that purchase and is willing to search through dozens of listings in hopes of finding a good deal, then including short sales may be for you.

Today’s Alameda Inventory

13-Apr-09
Total	160
94501	120
94502	40
SFR	96
Condo	38
Multi-Family	25
Short Sale	29
Foreclosure	7
Price Reductions	49
High List	$               2,345,000
Low List	$                  199,900
Link to Graph

The Foreclosure Wave Continues

The foreclosure wave continues to roll across the country and Alameda is not immuned. As long as you have been awake in the last 18-months the foreclosure market has been one hot topic and from what I can tell it may be another 18 before we find something else to talk about in real estate.

To add fuel wave of information to this topic Foreclosures.com announced that completed foreclosures in February reached the highest monthly total since the foreclosure crisis began, soaring by more than 67 percent over January's reduced foreclosures, according to the latest U.S. Foreclosure Index released today by the website.

According to Foreclosures.com: In February, 121,756 new foreclosures were completed, up from 72,694 in January, which had seen a 26 percent drop from December's 97,841 foreclosures. The February number topped the previous monthly high of 104,243 new foreclosures seen last September - then the high-water mark for this crisis. It shows a new wave of distressed properties hitting the market.

Chart of Alameda Listing

Link to Lager Version

In the past three months Alameda saw a peak on February 15, 2009 with 40 distressed properties listed for sale on the MLS and the distressed inventory has remained flat for the past three weeks. Realtytrac as a much bigger number on their website, they list 70 properties that are Banked Owned (a.k.a. Real Estate Owned (REO)). That means their about 40+ properties that are not on the MLS. The website list 186 properties in pre-foreclosure, these are that are behind on payments and foreclosure process has begun. Here is a chart from Realtytrac tracking foreclosure sales:

The Island is seeing the flood leak into our community. Job loss, bad loans and declining home values have been a little more moderate, but the impact is now coming home. The pre-foreclosure number is a real warning signal for what may come. All the efforts by banks and goverment seem to be coming up short.

“Despite the efforts to stem foreclosures by government and many banks, the hopeful signs of the last quarter of 2008 and January didn't follow through in February,' says Alexis McGee, foreclosure expert, educator, and author. 'Many homeowners are in trouble and rising unemployment continues to threaten to intensify the problem.”

The U.S. Foreclosure Index also found the number of pre-foreclosure filings - the original filings that can lead to a foreclosure - increasing to the highest monthly total since the foreclosure crisis began, hitting 207,703 in February, up more than 24 percent from 166,860 in January and up 9 percent from 190,467 in December, the previous monthly high.

Foreclosures increased across the country despite a temporary halts by major banks and Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac previously had foreclosure moratoria from Nov. 26 to Jan. 31, which helped to slow down foreclosures during that period, and reinstated the moratoria in mid-February. Nearly all the bank moratoria have since expired or are about to expire.

The top five states that continue to dominate the numbers of foreclosures for February are California, Florida, Arizona, Michigan, and Texas.

California continues to dominate the numbers:
-- California: 23,988 foreclosures, up 67 percent from January and down 24.7 percent compared to September's high.
-- California: February pre-foreclosures are up 35.4 percent from January, and 7 percent higher from December.

Top 10 States Nationwide REOs Last 6 months

1. California

2. Florida

3. Arizona

4. Michigan

5. Texas

6. Georgia

7. Ohio

8. Nevada

9. Illinois

10. Tennessee

Top 10 States Nationwide Pre-Foreclosure Last 6 months

1. Florida

2. California

3. Arizona

 4. Illinois

5. Nevada

6. Texas

7. New Jersey

8. Georgia

9. Michigan

10. Oregon

Top 10 List Source: Foreclosures.com