DEL MAR, March 19 2012 -- Gooooooooood Monday morning San Diego! Rain, rain go away, Spring is here and a wealth of housing data here in California continues to point to an industry that is showing strong signs of moving in the right direction as we move closer to summer! Wait a minute… I think that’s the case… Strike that, reverse it… No, no, I’m quite sure things are looking up… I think. Confused yet? Ok, well let’s turn to DataQuick, an industry leader in real estate data and information solutions, and see what they have to say. Surely industry leaders have a clear-cut stance, forecast, prognostication, prediction, or prophecy up their proverbial sleeves, right?
DQ released strong supporting evidence of positive trending in Housing this week by way of analysis of the month of February. But is the good word fool’s gold? Conflicting data leaves a case to be made both for and against. As per DQ, an estimated 29,630 new and resale houses and condos were sold in the month of February in California. This represents a 5.4% bump from January’s 28,111 sales. To put this aspect of those who see a positive housing trend into a broader context, consider that February 2012 sales are up 8.5% from 27,320 in February 2011. DQ states that the median price paid for a California home in February 2012 was $239,000, which is a 1.3% bump up from the preceding January median of $236,000. Good news, good stuff at first glance.
Further, more and more mortgage defaults loom on the horizon, as more and more bad “liar” loans come to maturation. Whether due to the payment shock of the new payment due from the lender, or the deliberate, strategic mortgage default on the part of the borrower/homeowner to affect a short sale or loan modification, more and more properties will fall into distress, and move towards foreclosure. To date, these kinds of distressed properties, foreclosure resales and short sales combined, continue to comprise more than HALF of Cali’s resale market. In both January and February 2012, 34% of all Cali resales were properties that had been foreclosed on in the past year. While this is down from an over 40% clip last February 2011, one has to wonder if this number will be even larger next February. The cynic, and perhaps the realist alike, are likely to say YES, the number will be larger. If the failures of HARP I are any indicator as to the forecast of the impact of HARP II, overall industry cynicism is a line of thought that is hard to argue. The lack of equity in the marketplace along with stringent mortgage loan and refinance qualification parameters also fuel a cynical view on any positive trending. Even so, positive data is available and can’t be easily dismissed.
So here we are, a half decade into the industry post-cataclysm, still feeling as if passengers on Willy Wonka’s Wondrous Boat Ride. And while we’ve come a long way from having “no earthly way of knowing which direction we are going” it’s safe to say that through the dark, tumultuous ride of the Housing Collapse there at last appears to be glimpses of light at the end of the tunnel. Then again, we’ve been spun around so many times, one can’t exactly be sure “which way the river’s flowing” or if proverbial lights will be awaiting us at tunnel’s end. Hey, somebody’s gotta pay the power bill, right?Stay tuned for more Wonkaish cult-favorite references and industry analysis each and every Monday morning in my column at www.therealtyinsiders.com, and feel free to drop me a line or shoot me a mail at jasonb@tricastle.com with comments, or any questions you may have in regards to your Housing and/or Lending endeavors.
Jay’s Outlook: Rain falling from a cloudless, sunny sky
Jason Bernabei, TriCastle Realty
