Palos Verdes Foreclosures Updated 7/17/2013 (Go to bottom of page to view macro economic foreclosure information)
For more information on specific foreclosure properties, please visit Palos Verdes Foreclosures and South Bay Foreclosures Email or call for more detailed charts OR for charts specific to your city. Added note, the last chart is the most interesting for investors. Let me know if you have questions!
INVESTORS – Are you aware of how to benefit from “Short Sales”?
IF you would like more charts for your own city, just let me know… For each city, the following charts are available…. number of filings, outcomes, inventories, bid results, timeframes, by square foot, by year built, by loan balance, bedrooms, by estimated market value, by loan origination date, and foreclosure discounting…
Review the latest Palos Verdes Foreclosures trends, use our directory of California counties to see local foreclosure trends or search foreclosure listings for any City or ZIP code in the state. Our California housing and demographics data will help you understand the California real estate market. For more information on specific foreclosure properties, sign up for my Palos Verdes Foreclosures search utility Palos Verdes Foreclosures Filings—Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of an auction, and serve as the homeowner’s final notice before sale.
Palos Verdes Foreclosures charts
Palos Verdes Foreclosures Outcomes—After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank’s opening bid, the property will be Sold to 3rd Party; if not, it will go Back to the Bank and become part of that bank’s REO inventory.
Palos Verdes Foreclosures Inventories—Preforeclosure inventory is an estimate of the number of properties that have had a Notice of Default filed against the property, but have not yet been Scheduled for Sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale cancelled. The Bank Owned (REO) inventory indicates the number of properties that have been sold Back to the Bank at the trustee sale, and which the bank has not yet resold to another party.
Palos Verdes Foreclosures Bids—The Published Bid is the amount listed in the Notice of Trustee Sale and is typically the balance due at the original date of sale. The Opening Bid is the bank’s starting bid at auction, and is often discounted from the Published Bid. The Winning Bid is the highest bid received at auction and reflects the amount at which the bank or 3rd party purchased the foreclosure.
Palos Verdes Foreclosures Discounting—This chart compares the winning Bid Amount of properties sold at trustee sale to both the outstanding Loan Amount, and the current Market Value. Banks place an Opening Bid for each property and if a 3rd Party does not make a higher bid, the property will be sold Back to Bank (REO) for the Opening Bid amount. Properties Sold to 3rd Parties will typically have Winning Bids with deeper discounts to both Loan Amount and Market Value as only low Opening Bids will attract investor interest. NO DATA AVAILABLE THIS MONTH; however, here’s the chart for 90275
Time to Foreclose—The average number of days between the filing of the Notice of Default and the final sale at auction for foreclosure sales that occurred during the specified month. Time to Resell—The average number of days between the final sale at auction and when the property was resold by the bank or 3rd party.
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Market Activity
June 2013 California single-family home and condominium sales (aggregate sales) fell 2.3 percent from May, and 5.9 percent in the past 12 months (y-o-y). We define aggregate sales as the sum of distressed plus non-distressed property sales. Driving the decline in aggregate sales was the sharp change in the mix of distressed and non-distressed sales.
To get a clearer picture of current real estate sales trends and to eliminate seasonal factors, it’s helpful to compare last month’s distressed and non-distressed property sales to June sales in prior years. Distressed property sales fell 46.5 percent in the past 12 months, while non-distressed property sales jumped 31.3 percent. The larger decline in distressed property sales overshadowed the increase in non-distressed property sales.
The decline in distressed property sales is primarily due to government intervention that has slowed the flow of distressed properties to the marketplace. Despite this intervention, distressed sales comprise nearly 30 percent of total sales, more than three times historic averages, and remain an important part of the California real estate market.
In June 2013, distressed property sales were 29.3 percent of total sales, a 1.3 percentage point decline from 30.6 percent in May, down 21.2 percentage points from 50.5 percent in June 2012. Meanwhile, in June 2013, non-distressed sales accounted for 70.7 percent of total sales, a 1.3 percentage point gain from 69.4 percent in May. On a year-ago basis, June non-distressed property sales gained 21.2 percentage points from 49.5 in June 2012.
At the County Level, Non-Distressed Property Sales Post Strong Gains
At the county level, the percentage of non-distressed property sales relative to distressed sales varied dramatically. In general, the higher-income coastal areas of California experienced fewer distressed property sales in June, while the central parts of California continued to see higher levels of distressed property sales. Despite the decline in distressed property sales in the central parts of California, they remain historically high.
In June 2013, Merced County had the largest percentage of distressed property sales at 50.5 percent, down from 68.8 percent a year ago. Meanwhile, San Francisco County had the smallest percentage of distressed property sales at 10.1 percent, down from 24.7 percent a year ago.
While Solano County topped the list of counties with the largest percentage of distressed property sales in May, by June it was no longer in the top 5. Solano County topped the list of counties with the biggest drop in distressed property sales, falling 31.2 percentage points from 70.0 percent in June 2012 to 38.8 percent in June 2013. The other four counties with the largest decline in distressed property sales were San Joaquin, Alameda, Santa Barbara and Stanislaus Counties.
Table 1 lists the top 5 counties with the highest percentage of distressed-property sales, the lowest percentage of distressed property sales, and the biggest annual change in distressed property sales.
Table 1 – Top 5 California Counties with the Largest and Smallest and Biggest Y-o-Y Change
in Percentage of Distressed Property Sales
Homeowner Equity
The biggest challenge confronting the California real estate market remains the huge numbers of California homeowners owing significantly more than their homes are worth. Underwater homeowners can neither sell their existing home, without impact their credit, nor in most cases buy another home, removing this important segment of the housing market from either contributing to housing inventory for sale or becoming potential buyers.
As of June, out of 8.6 million California homeowners with a mortgage, 2.1 million were underwater. Another approximately 500,000 homeowners had 10 percent or less equity in their properties. We define this group of homeowners as “near negative equity” and include them in the analysis because closing costs and repairs associated with the sale of a home typically amount to 6 to 10 percent of the sales price leaving these homeowners effectively underwater. The total of these two classes of underwater homeowners is 2.6 million. Of those 2.6 million underwater homeowners, more than 1.3 million owe more than 125 percent of their home’s value.
Rising home prices will continue to lift some underwater homeowners into a state of positive equity and into a position where they could choose to sell which could help alleviate some of the current inventory problem.
On average, in 2013 California home prices have been rising 1 to 2 percent per month translating into an annual gain of 12 to 24 percent. If home prices increase 10 percent, approximately 500,000 homeowners, or nearly 20 percent of negative equity homeowners, will be returned to a positive equity state. In addition, if home prices rise 20 percent, an estimated 800,000 homeowners, or approximately 30 percent of negative equity homeowners, will transition to a positive equity state. Even with a further 20 percent increase in home prices 1.8 million homeowners will remain underwater.
Median Prices
In last month’s California Property Report, we introduced the concept that a mix, in this case distressed vs. non-distressed California single-family home sales, is skewing aggregate median sales price estimates and perhaps making them an unreliable measure of property value.
The median sales price of a California home jumped 33.9 percent from $310,000 in June 2012 to $415,000 in June 2013, improving on a 29.7 percent increase from May 2012 to May 2013. In the year ended June 2013, however, the mix of distressed versus non-distressed property sales changed dramatically. In June 2012, distressed property sales accounted for 52.2 percent of total sales. By June 2013 distressed property sales had fallen to 29.3 percent of total sales.
In the following graph we highlight median sales price trends and sales volume from June 2001 to June 2013. Aggregate single-family home median sales prices are shown in blue, distressed median prices are in red and non-distressed median prices are in green. Distressed sales are shown as lavendar bars, non-distressed sales are shown as gray bars.
Not surprisingly, when distressed property sales as a percent of total sales ranged from a low of 6.1 percent to a high of 17.2 percent from June 2001 through August 2007, aggregate median sales prices closely mirrored the median sales prices of non-distressed properties. As California real estate sales collapsed and the percentage of distressed property sales increased dramatically, the aggregate median sales price gravitated towards the median sales prices of distressed properties. Since June 2012, the rapid change in the mix of distressed and non-distressed property sales, particularly since January 2013, has pulled the median price of aggregate sales back towards the median sales prices of non-distressed properties.
Cash Sales
In June 2013, cash sales were 26.4 percent of total sales, down 0.5 percentage points from 26.9 percent in May. Cash sales as a percent of total sales peaked at 33.8 percent in February 2013, have retreated 7.4 percentage points, but remain at an elevated level.
Despite the recent decline in cash sales and the change in mix, cash sales remains high relative to pre-2008 levels. The following graph illustrates historic trends punctuating the fact that cash sales remain an important part of the real estate marketplace.
Foreclosures
June 2013 Notices of Default (NODs) in California fell 15.1 for the month to 8,317. NODs have averaged nearly 8,900 per month since February after falling to a low of 4,856 in January. The sharp decline in January was due to seasonal factors and the implementation of the California Homeowner Bill of Rights, which went into effect January 1.
Notices of Trustee Sale were down 20.8 percent for the month and down 61.0 percent for the year.
California foreclosure sales totaled 2,159 in June, down 14.1 percent from May and down 63.6 percent in the past 12 months, their lowest level since January 2007.
The drop in May and June foreclosure sales was due, in part, to an Office of the Comptroller of the Currency (OCC) guidance letter that specified minimum standards for handling borrower files subject to foreclosure. As a result of the letter, several of the largest banks — Bank of America, Citi, JP Morgan and Wells Fargo Bank — either slowed or stopped their foreclosure sales in May. By the end of May, Bank of America and JP Morgan had resumed their foreclosure sales activity, though it remained well below pre-May levels. As of June 16, it appears that both Citi and Wells Fargo Bank have resumed California foreclosure sales. With the return of the big banks to the foreclosure marketplace, foreclosure sales will likely increase in July.
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