In 2009, the first of many housing bottoms were declared. Lending was tighter, but not as tight as it is right now and there were Federal and State tax credits. In 2012, these people are now getting delinquent on their mortgages, which is have major impact on the FHA reserve fund. As a reminder the FHA program is the low down payment program.
New FHA Foreclosures Spike
By: Diana Olick CNBC Real Estate Reporter
As lenders continue to try to modify delinquent mortgages or offer foreclosure alternatives, like short sales or deeds-in-lieu of foreclosure, the number of loans entering the foreclosure process are falling.
So-called “foreclosure starts” were down 2.6 percent in April from the previous month, according to a new report from Lender Processing Services.
But it’s not all good news.
FHA loans, those insured by the federal government, saw a huge spike in foreclosure starts, up 73 percent during the month, according to the LPS report. Loans originated in 2008 and 2009 are primarily to blame, although all FHA vintages did see some, albeit far smaller, increases.
“In 2008, when the loan origination market virtually dried up, the FHA stepped in to fill the void,” explained Herb Blecher, senior vice president for LPS Applied Analytics. “FHA originations tripled that year, and increased to five times historical averages in 2009. High volumes like that, even with low default rates, can produce larger numbers of foreclosure starts.”
La Harba Overview
| Median home price is $281,000. Based on a rental parity value of $440,000, this market is under valued. |
| Monthly payment affordability has been improving over the last 1 month(s). Momentum suggests unchanging affordability. |
| Resale prices on a $/SF basis declined from $208/SF to $204/SF. |
| Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. |
| Median rental rates increased $101 last month from $1,746 to $1,848. |
| Rents have been slowly rising for 1 month(s). Price momentum suggests slowly rising rents over the next three months. |
| Market rating = 7 |
Proprietary OC Housing News home purchase analysis 
711 North DEXFORD Dr La Habra, CA 90631
$365,000 …….. Asking Price
$525,000 ………. Purchase Price
6/3/2005 ………. Purchase Date
($160,000) ………. Gross Gain (Loss)
($42,000) ………… Commissions and Costs at 8%
============================================
($202,000) ………. Net Gain (Loss)
============================================
-30.5% ………. Gross Percent Change
-38.5% ………. Net Percent Change
-5.2% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$365,000 …….. Asking Price
$12,775 ………… 3.5% Down FHA Financing
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$352,225 …….. Mortgage
$93,511 ………. Income Requirement
$1,641 ………… Monthly Mortgage Payment
$316 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$91 ………… Homeowners Insurance at 0.3%
$367 ………… Private Mortgage Insurance
………… Homeowners Association Fees
============================================
$2,416 ………. Monthly Cash Outlays
($251) ………. Tax Savings
($526) ………. Equity Hidden in Payment
$16 ………….. Lost Income to Down Payment
$111 ………….. Maintenance and Replacement Reserves
============================================
$1,767 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,150 ………… Furnishing and Move In at 1% + $1,500
$5,150 ………… Closing Costs at 1% + $1,500
$3,522 ………… Interest Points
$12,775 ………… Down Payment
============================================
$26,597 ………. Total Cash Costs
$27,000 ………. Emergency Cash Reserves
============================================
$53,597 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..
We're sorry, but it seems that we're having some problems loading MLS # S699216 from our database. Please check back soon.
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$325,000 2321 OTIS Ave |
0.25 miles 4 bd / 2 ba 1,740 Sq. Ft. |
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$410,000 9132 SHARON Way |
0.25 miles 3 bd / 1.75 ba 1,509 Sq. Ft. |
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$400,000 2620 RAINIER Way |
0.26 miles 4 bd / 2 ba 1,643 Sq. Ft. |
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$439,000 351 PARSONS St |
0.34 miles 3 bd / 2 ba 1,886 Sq. Ft. |
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$425,000 200 RIGSBY St |
0.36 miles 3 bd / 1.75 ba 1,962 Sq. Ft. |
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$489,900 1201 SHARPLESS St |
0.39 miles 3 bd / 1.75 ba 1,816 Sq. Ft. |
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$534,500 16522 ANCEP St |
0.43 miles 4 bd / 2.75 ba 2,263 Sq. Ft. |
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$435,000 350 OAKLAND Dr |
0.6 miles 4 bd / 1.75 ba 1,707 Sq. Ft. |
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$375,000 1301 EDGEMONT St |
0.6 miles 4 bd / 2 ba 1,540 Sq. Ft. |
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$349,900 16436 LEBO St |
0.61 miles 3 bd / 2 ba 1,549 Sq. Ft. |
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See the enormous foreclosure pipeline for yourself below. Enter location and press search. Scroll through list by pressing "next."
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Radar Logic is going against the chorus of bottom callers and wisely acknowledging the supply problem overhanging the market.
Radar Logic: Prices Will Fall Further, Strengths Due to Temporary Forces
Even though Radar Logic reported a monthly increase in home prices for March, the analytics company expects prices to fall and gave credit to “temporary market forces” for recent strengths seen in the housing market.
“In light of the oversupply we continue to see in the market, we disagree with the widespread view that home prices have reached a bottom or will do so in the near future,” said Michael Feder, president and CEO of Radar Logic.
Feder added that a negative response to economic news, either in the U.S. or elsewhere, could also undermine housing demand and seriously hurt home prices.
According to Radar Logic, the RPX Composite price, which tracks home prices in 25 major metropolitan areas, showed a 1.8 percent increase on a monthly basis, but decreased by 0.87 percent year-over-year in March.
With distressed homes remaining a significant portion of home sales transactions, Radar Logic said the significant discounts for distressed properties in relation to non-distressed means a further fall in prices.
According to RealtyTrac, homes in foreclosure or bank-owned accounted for 26 percent of all residential sales during the first quarter of 2012. In addition, the average sales price of homes in foreclosure or bank-owned in the same quarter was $161,214, which is a 27 percent discount compared to the average sales price of homes not in foreclosure or bank-owned.
Quinn W. Eddins, director of research and author of the report, wrote, “Large inventories of REO and homes in the foreclosure process still have to make their way into the ‘visible’ inventory of homes listed for sale, and as they do they will weigh on home prices.”
As for the temporary forces giving the market an added boost, the report named institutional investors as one of the driving factors. As rental prices increase, large investors are buying up discounted properties to convert them into rental units. This trend is driving up prices for distressed properties in certain metros where investor demand is high. Once prices for discounted properties rise to the point that investors won’t yield the return they are seeking, demand will decline again.
Another market influence Radar Logic highlighted is the mild winter weather that was seen in many parts of the U.S. This led to an earlier start for home shopping. As a result, Radar Logic said the price for March’s strength may be paid by a weaker buying season later.
Radar Logic expects national home prices to decline over the next 18 months, but said when it comes down to it, timing of the bottom is academic.
However, the analytics company said, “The important point is that national home prices are not going to increase in a sustained and meaningful manner anytime soon.”
That picture is priceless, it really displays a home worth $65,000 or less, not $365,000, in any sane market. Also, the charming sign on the gate in red letters says “NO BUYERS”, as I look at it. The picture has an amazing subtle feature, which is the lovely television antenna sticking up…but vaguely…into the absolute middle center of the picture and the viewer’s subconscious. How can Realtors even submit such pictures? If anything says “don’t buy in this neighborhood or anywhere near here”, this is the home. Well, maybe a trash can or two added to the bare dirt in the front would have been a nice final touch…hmmm…full or empty?
Sometimes I forget how insane California house prices are. That house would be $65,000 in many other markets.