For the month of May the median selling price was $420,000, the last time it was higher was September of 2008. It is down 12.2% from a year ago and 35% below its peak of June 2007.  Prices have been falling at a year over year basis since September of 2007 with the worst month being August 2009 when it fell 31.5%. 

Last month single-family homes sold for 35% less than their peak pricing and condos sold for 38% below their peak that was reached in March 2006.  Builder prices for new homes are 38% below their February ’05 peak.

In the month of May Orange County homebuyers purchased 2,915 home which is up 14.3% from a year ago. May was the 11^th straight month of sales gains vs. the year-ago period.  That follows 33 consecutive months where sales failed to beat the previous years pace. 

The City of Fullerton is having their annual Old –fashioned Fourth of July festival and firework spectacular.  Fullerton High School Stadium is located on 201 E. Chapman Ave and will be hosting entertainment including circus acts, carnival games, pony rides, live music with Dick Dickerson (rockabilly, country) and a fireworks show. 

Food is available for purchase in the festival area. There is no alcoholic beverage service.All food is reasonably priced, and is being offered by local charity organizations as a fundraising activity (funnel cakes, popcorn, beef jerky, Mexican food, Thai food, ice cream, pizza and more). Games, food and attractions cost extra but admission is free. 

No alcohol is served or allowed in the area. All coolers will be checked. No glass containers, no smoking, no umbrellas, and no pets (seeing eye dogs are allowed).

Fireworks begin at 9:00 p.m. and last for approximately 20 minutes

Please call 714-738-6575 for more information.

The latest information release from DataQuick shows that home prices have begun to increase in the recent months. 

Home prices in Orange County are likely to fall 19.1% more - the 15^th biggest drop out of 100 metropolitan areas in the U.S.A.  When the dust settles, O.C. prices will have tumbled 49.7% from the peak of the market to the bottom of the 3.5-year-old slump. If true, that means that a median-priced home here will sell for $311,000 to $325,000 at the bottom of the slump.

As for other SoCal metro areas, prices are projected to drop14.3% in the Inland Empire, 11.3% in Los Angeles County and 8.7% in San Diego County.

The city with the largest drop in home prices was New York City which is predicted to fall 40.6% more.

Nationwide, the forecast predicted that U.S. home prices may drop 14% more. Home prices in the United States will fall 41.7% from their peak.

The Mortgage Bankers Association announced that the number of mortgage applications rose 6% last compared to the prior week and nearly 18% compared to the same period a year ago.  Only 4.1% people applied for an adjustable rate loan in the last week.

Since last week the refinance index rose 5.9% and the purchase index jumped 7.3%; even with the increases though both indexes are well below their peak levels.

In the last week the average contract interest rate for 15-year fixed rate mortgages decreased to 4.93 percent from 4.99 percent, with points decreasing to .92 from .99 for 80% LTV loans.  The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.44 percent from 5.50 percent, with points increasing to 0.99 from 0.89 for 80% loan-to-value ratio loans.  The average contract interest rate for one-year ARMs remained unchanged in the last week at 6.54 percent with points increasing to 0.11 from 0.09 for 80% LTV loans.

The Federal Housing Administration insured $27.3 billion in single-family mortgages in April, which is a 85 increase from the previous month which is due to higher mortgage purchase volume. 

In the last month mortgage purchase volume has raised $1.6 billion to $11.7 billion, while refinancing rose by $350 million to $15.6 billion.  FHA servicers ramped up their loss mitigation efforts and were able to complete 7,366 loan modifications in April – up from 4,837 in March.  Unfortunately the percentage of FHA loans 90 or more days past due hit 7.32% in the month of April.

Under the FHA loans consumers pay an insurance premium and that pool of premiums protects not holders from losses on the loans.  The program is run by HUD so if many consumers become delinquent then it could land on the shoulders of tax payers.

Recently FHA has accounted for 25% of purchase loans in Orange County.  Prior to the credit crisis this loan was rarely used here because it could only insure small loan sizes. Most buyers use FHA to put down as little as possible – close to the minimum 3.5%

The Federal Reserve has announces that it will allow one of its emergency programs to expire and trim down two other programs.  This is sign that the financial markets are beginning to improve and is the first step towards terminating all of the Federal Reserve’s unprecedented interventions.

The three programs provide funds or treasury securities to security brokers and money-market funds.  This provisions are authorized a loop hole allowing loans to non-banks in “unusual and exigent circumstances.”

The Federal Reserve also extended five other emergency facilities that would have expired Oct. 30 to Feb. 1, 2010.  The facilities include foreign-currency swap lines with central banks around the world.

The Fed released a statement stating that : “Conditions in financial markets have improved in recent months, but market functioning in many areas remains impaired and seems likely to be strained for some time.”

Extended Stay Inc. – which has 10 hotels located in Orange County – has filed for bankruptcy protection.  The hotels are staying open and welcoming guests as usual even as they deal with their financial situation.  In a press release they stated “for hotel guests, the story is the same: the same great service, the same convenient locations, same comfortable, value-priced hotel rooms. All hotels are open and welcoming guests as usual.”

At this point the company claims that they have no plans to close or sell any of its hotels and will continue to service value-oriented customers seeking longer-term hotel stays. 

This news follows last week’s announcements of the bankruptcy of other upscale Orange County hotels.

Professors at Chapman University have release their semi-annual Orange County forecast.

The median income of family in Orange County is $78,500 for 2009, so in order for a homebuyer in O.C. to purchase a median-priced home they would need to allocate 27.4$ of income. 

By the third quarter of 2010 the year-over-year percentage changes in median home prices will turn positive. 

The median price of a resale single family home will show prices up 1.6$ in Orange County in 2010.  This is following the projected loss of 17.9% in Orange County for 2009. 

For the month of May the banks seized 591 houses and condos in Orange County which is a 22.6% increase from April but at 47.7% decrease from May of 2008. 

As the chart shows, foreclosures begin to fall after a state law was enacted in September requiring lenders to talk to borrowers about methods to avoid foreclosure at least 30 days before filing a notice of default. Many people believe that the law only delayed foreclosures.  The new moratorium that was enacted allows loan servicers to apply for an exemption to the moratorium by showing they are already doing loan modifications. 

With the economy in turmoil more banks are doing loan modifications which could explain why foreclosures remain below the peak level of 2008, when banks were seizing more than 1,000 homes per month throughout the county.  Unfortunately the data also shows that borrowers are re-defaulting more than half the time after getting a modification. 

When the September law was enacted the number of default notices decreased but they have since rebounded.  Last month banks filed 2,590 notices of default which is down 12.1% from April but up 4.9% from a year ago. 

The median price of O.C. homes rose in the month of May. Aided by the slight decrease in the sale of foreclosed and a slight increase in the sale of higher priced home.

Half of all the existing houses and condos sold in Orange County in May were foreclosed homes.  When foreclosure re-sales were in their peak in February 57% of homes sold in O.C. were foreclosures.

In May 17% of homes selling for over $500,000 were sold as opposed to only 15.2% in April. It appears the home buying market is in the beginning stages of reaching a more normal balance of sales prices.  It must be noted that some of the current change in home buying trends may be due to the fact that we are now in the midst of the peak home buying season. 

Orange County’s median home price was down 51% from the peak of $505,000 reached in 2007.