Anaheim Hills Blog

Jonathan Lansner blogs on the OC housing inventory.

Mike Kelly (First Team Real Estate) — Tue, 30 Jun 2009 01:28:38 -0700

The latest reading on the Orange County housing market from Steve Thomas at Altera Real Estate, with data as of last Thursday ... After rising much of the year ... demand, measured as new pending sales in the past month, dropped by 23 in two weeks to 3,629. Demand is +623 vs. year ago. Inventory of homes for sale dropped by 125 homes in two weeks to 9,188 - lowest supply level since February 2006 and down 5,652 in a year. Expected market time - how long it would take to sell current inventory at the recent sales pace - dropped a smidge in two weeks to 2.53 months vs. 4.94 a year ago. Market time was last this low in September 2005. Thomas says: "Typically at this time of year demand reaches a plateau and begins to drop a bit in July before increasing one last time for the year in August." And look at how price matters, in terms of Thomas market time ... For under a half-million, it theoretically will take 1.58 months to sell off all inventories. Half-mil to $1 million? 2.75 months. If it's a 7-figure listing, it's 13.08 months.

As of 6/25	Supply	Deals	Time (mos.)	2 wks. ago	1 yr. ago
•0-$250k	1,488	758	1.96	2.07	4.08
•$250-500k	2,274	1,619	1.40	1.40	4.08
•$500-750k	1,669	750	2.23	2.20	4.07
•$750k-$1m	1,093	256	4.27	3.80	6.23
•$1-1.5m	1,012	115	8.80	8.53	9.23
•$1.5-2m	581	50	11.62	12.36	13.25
•$2m-4m	769	39	19.72	29.38	20.02
•$4mil+	398	7	56.86	39.10	26.38
All O.C.	9,188	3,629	2.53	2.55	4.94

"To strive, to seek, to find, and not to yield!" Alfred Lord Tennyson, (1809-1892), English poet....

The latest city by city stats for the OC......

Mike Kelly (First Team Real Estate) — Tue, 30 Jun 2009 01:26:25 -0700

Town	ZIP	Price	Yr. chg.	Sales	Yr. chg.
Aliso Viejo	92656	$420,000	-5.6%	79	+9.7%
Anaheim	92801	$282,500	-21.0%	39	+50.0%
Anaheim	92802	$320,000	-12.3%	22	+100.0%
Anaheim	92804	$305,000	-20.5%	60	+11.1%
Anaheim	92805	$316,500	-11.0%	80	+233.3%
Anaheim	92806	$350,000	-20.0%	13	+0.0%
Anaheim	92807	$482,500	-0.5%	36	+0.0%
Anaheim	92808	$440,000	-17.6%	24	-20.0%
Brea	92821	$498,000	+6.0%	16	-42.9%
Brea	92823	$573,500	+10.9%	5	+66.7%
Buena Park	90620	$390,000	-3.7%	56	+51.4%
Buena Park	90621	$300,000	-24.1%	17	-34.6%
Corona del Mar	92625	$1,125,000	-29.7%	13	-31.6%
Costa Mesa	92626	$505,000	-2.6%	31	+19.2%
Costa Mesa	92627	$485,000	-9.9%	39	+56.0%
Cypress	90630	$480,000	+3.7%	32	+6.7%
Dana Point	92624	$562,500	+132.4%	12	+200.0%
Dana Point	92629	$747,500	+9.5%	34	+30.8%
Foothill Ranch	92610	$450,000	-10.9%	17	+70.0%
Fountain Valley	92708	$545,000	-10.7%	34	-22.7%
Fullerton	92831	$405,000	-22.5%	31	+82.4%
Fullerton	92832	$304,500	-40.9%	11	+10.0%
Fullerton	92833	$360,000	-39.8%	52	+52.9%
Fullerton	92835	$547,500	-18.9%	19	-26.9%
Garden Grove	92840	$320,000	-13.7%	50	+47.1%
Garden Grove	92841	$381,000	-7.1%	34	+70.0%
Garden Grove	92843	$300,000	-17.8%	38	+52.0%
Garden Grove	92844	$265,000	-35.4%	21	+50.0%
Garden Grove	92845	$483,750	+0.8%	7	-36.4%
Huntington Beach	92646	$510,000	-2.9%	59	+13.5%
Huntington Beach	92647	$477,500	-16.1%	38	+15.2%
Huntington Beach	92648	$740,750	-1.2%	51	+4.1%
Huntington Beach	92649	$511,000	-10.7%	27	+3.8%
Irvine	92602	$580,000	-1.4%	28	-9.7%
Irvine	92603	$760,000	-8.4%	32	+14.3%
Irvine	92604	$494,500	-17.6%	25	+25.0%
Irvine	92606	$546,500	-14.3%	20	+25.0%
Irvine	92612	$530,000	+4.7%	24	+14.3%
Irvine	92614	$530,000	+6.3%	27	+28.6%
Irvine	92618	$436,000	-12.1%	21	+162.5%
Irvine	92620	$632,500	-1.9%	53	+29.3%
Ladera Ranch	92694	$535,000	-22.2%	45	+21.6%
La Habra	90631	$285,000	-16.8%	37	-17.8%
La Palma	90623	$525,000	-3.7%	10	+0.0%
Laguna Beach	92651	$1,143,750	-32.2%	34	+70.0%
Laguna Hills	92653	$367,500	+18.2%	39	-9.3%
Laguna Niguel	92677	$525,000	-19.2%	84	-5.6%
Laguna Woods	92637	$231,000	-3.8%	19	-9.5%
Lake Forest	92630	$400,000	-6.9%	51	-5.6%
Los Alamitos	90720	$640,250	-18.2%	14	-17.6%
Midway City	92655	n/a	n/a	n/a	n/a
Mission Viejo	92691	$390,000	-18.3%	48	+14.3%
Mission Viejo	92692	$507,500	+6.5%	55	-1.8%
Newport Beach	92660	$867,000	-32.8%	28	+12.0%
Newport Beach	92661	$1,375,000	-16.7%	5	-16.7%
Newport Beach	92662	n/a	n/a	n/a	n/a
Newport Beach	92663	$600,000	-30.4%	14	-26.3%
Newport Coast	92657	$1,734,000	-14.3%	14	+27.3%
Orange	92865	$383,000	-29.7%	21	-22.2%
Orange	92866	$466,000	-2.4%	8	+100.0%
Orange	92867	$450,000	-7.2%	36	-10.0%
Orange	92868	$317,500	-3.8%	14	-17.6%
Orange	92869	$442,500	-15.7%	49	+53.1%
Placentia	92870	$424,000	-9.4%	45	+7.1%
Ran.S. Margarita	92688	$344,750	-19.8%	71	+10.9%
San Clemente	92672	$525,000	-33.1%	35	+0.0%
San Clemente	92673	$641,500	-18.7%	33	-13.2%
San Juan Capo	92675	$285,000	-22.1%	32	-8.6%
Santa Ana	92701	$120,000	-48.9%	44	+144.4%
Santa Ana	92703	$228,500	-25.9%	64	+106.5%
Santa Ana	92704	$265,500	-21.9%	51	+10.9%
Santa Ana	92705	$310,000	-49.8%	54	+86.2%
Santa Ana	92706	$335,000	-29.0%	27	+107.7%
Santa Ana	92707	$225,000	-15.9%	75	+120.6%
Seal Beach	90740	$730,000	+16.2%	17	+54.5%
Stanton	90680	$280,500	-18.2%	32	+39.1%
Trabuco/Coto	92679	$665,000	-7.5%	56	+69.7%
Tustin	92780	$245,000	-34.4%	46	+12.2%
Tustin	92782	$732,500	-1.2%	59	+31.1%
Villa Park	92861	$1,086,500	+17.5%	4	-50.0%
Westminster	92683	$405,000	-6.9%	74	+60.9%
Yorba Linda	92886	$545,000	-24.8%	53	+10.4%
Yorba Linda	92887	$607,500	+92.9%	20	+100.0%
Total O.C.		$420,000	-11.9%	2,898	+18.7%

Matthew Padilla of the Register states banks reject the toxic asset plan.

Mike Kelly (First Team Real Estate) — Mon, 29 Jun 2009 11:03:36 -0700

The Wall Street Journal reports Treasury Secretary Timothy Geithner's plan to help investors buy troubled assets from banks has lost momentum. Big banks worried about having to sell at fire-sale prices while small banks feared they would be shut out. Potential buyers balked at the risk of doing business with the government, concerned that politicians might demonize them for making big profits. The Public-Private Investment Program, or PPIP, has faced resistance since it was announced in March. And the Federal Deposit Insurance Corp. has essentially shelved the part of PPIP that called for the government-financed buying of whole loans. Treasury is supposed to move forward with a focus on buying securities, but now that may be greatly reduced. The Journal quotes Lee Sachs, counselor to the Treasury secretary, as saying the department remains committed to the program and has received more than 100 applications from potential investment managers. Read the full story HERE. Meanwhile, the Bank of International Settlements, which represents the world's leading central bankers, released a report today that, among other things, argues bad assets remain a threat (I added the bold type): Overall, governments may not have acted quickly enough to remove problem assets from the balance sheets of key banks. The 1990s experience of the Nordic countries indicates that addressing problem assets is necessary to reduce uncertainties, re-establish confidence in a lasting way and lay the basis for an efficient financial system (see Box VI.B). Despite acknowledging these lessons, the steps taken so far have focused largely on providing guarantees and subsidised capital. At the same time, government guarantees and asset insurance have exposed taxpayers to potentially large losses. Progress on problem assets has been slowed by the complexity of the securities affected, legal constraints and, above all, the limited political will to commit public funds to the clean-up effort. The lack of progress threatens to prolong the crisis and delay the recovery because a dysfunctional financial system reduces the ability of monetary and fiscal actions to stimulate the economy. The lack of progress on removing troubled assets from the banks' balance sheets and recognising the associated losses is illustrated by the USexperience. Rather than buy impaired assets directly, the US Treasury outlined a plan in March, the Public-Private Investment Program (PPIP), to value these assets and to remove them through an auction mechanism. Under the PPIP, eligible private sector investors are invited to bid on troubled real estate assets held by banks. Winning bids receive matching government capital and non-recourse funding on attractive terms, with the US government assuming any losses beyond the equity invested. The generous terms were designed partly to boost the value of the underlying securities, to provide sufficient incentives for private capital inflows and to attract expertise to value and manage these assets. Despite the favourable terms, as of May 2009 the outlook for the PPIP was uncertain. To increase confidence in the banks, US regulators conducted stress tests on 19 bank holding companies in April 2009 to ensure that they weresufficiently capitalised given a set of assumptions about losses on various bank assets over the next two years. Following the release of the results in early May, US regulators directed 10 of the banks examined to increase their level of capital or to improve the quality by including more common shares. Several banks took advantage of the reduced uncertainty and the increased risk appetite of investors that accompanied the publication of the stress test results to raise equity and issue debt. While the United Kingdom conducted a similar exercise, other European countries were still debating the merits of an EU-wide stress test. What seems clear is that the deterioration in credit quality will generate more losses on banks' loan books and other credit exposures (see Chapter III).Banks may therefore have an incentive to delay recognising losses, aided by accounting rules that provide management more discretion over when towrite down assets. Taxpayers will not want to be exposed to greater potential losses, but key financial institutions are likely to require more government support in order to facilitate the required adjustments, to restore confidence in the financial system and to restart lending.

Jon Lansner posts the latest from CAR on housing inventory.....lowest in 3.5 years!

Mike Kelly (First Team Real Estate) — Mon, 29 Jun 2009 10:56:55 -0700

June 29th, 2009, 12:05 pm · 21 Comments · posted by Jeff Collins Click to enlarge The California Association of Realtors reported that the time it would take to sell all the houses for sale in Orange County fell last month to the lowest level since October 2005, the month the housing slump began. According to the association: It would take 6.3 months to sell last month's inventory of houses for sale at May's sales pace. That's the lowest level since October 2005, considered the start of the housing slump because sales began to falter then. That's three months quicker than the year before. The revised May 2008 listings index showed that it would have taken 9.5 months to sell all the houses then for sale. The numbers are in line with other reports. Aliso Viejo broker Steve Thomas, for example, reported that the county had 9,313 homes listed for sale in the local Multiple Listing Service. That's the lowest number of homes on the market since February 2006. By Thomas' math, the time to sell all the county's listings is now at the lowest level since September 2005. In other real estate news ... 179,000 O.C. homes won't see taxes go up Insider Q & A told building turnaround not expected until 2012 Vegas tycoon buys Emerald Bay home for $28 million $10 million discount offered for Balboa home Orange County's 10 priciest home sales Mall getting $100 million makeover Realtors report 10% jump in O.C. house prices Could be worse! LA/OC housing ranks 88 of 100 Builder's losses entering 3rd year Fed trims emergency lending Mortgage applications rose on dip in rates Foreclosures create opportunity for HOA firm Agent: Short sales now go ‘a lot faster' Can you make $$ as an Irvine landlord? Lose your job? These folks can pay your mortgage Posted in: Inventory • Top tale • California Association of Realtors • numbers You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed. 21 Comments

House prices continue decline....but more slowly according to Jeff Collins of the Register

Mike Kelly (First Team Real Estate) — Mon, 29 Jun 2009 10:54:56 -0700

House prices continue to fall from year-ago levels but the rate of decline is slowing, a possible sign that price drops are approaching bottom, said Santa Ana-based First American CoreLogic’s latest Home Price Index. The index shows: •Orange County house prices fell 12.5% in April from the year before. •That’s the smallest percentage decline since November 2007. •Price drops were greatest here in July, when the house price fell nearly 22.9%. •The rate of decline has been decreasing, more or less, since then. •Orange County’s percentage drops in home prices ranked 18th out of 35 U.S. metro areas. •The Inland Empire had the biggest percentage drop in April: -29.6%. •Miami and Las Vegas had the second- and third-highest percentage drops at -29.5% and -27.7% respectively. The trend is similar for the nation as a whole, First American reported. National housing prices fell 10.2% in April, which also was the smallest year-over-year decline this year. Price decreases peaked at -18.1% in August and have been shrinking since, the real estate data firm reported. California, which ranked No. 1 in price declines among states for 20 consecutive months, moved into third place in April. Home prices fell 22.7% in April. Nevada replaced California in the No. 1 spot with a 26.1% decline in April, followed by Florida at -23.2%. Said Mark Fleming, chief economist of First American CoreLogic: “There is still a great deal of uncertainty with the housing market and the economy in general. But the rate of change in home price declines is beginning to show signs of not only a bottoming, but an improvement in both nominal and real terms, which is the more important indicator because real prices adjust for the distortions caused by inflation or deflation.” In other real estate news … •Grand opening nears after 2-year delay •House listings index lowest in 3 1/2 years •179,000 O.C. homes won’t see taxes go up •Insider Q & A told building turnaround not expected until 2012 •Vegas tycoon buys Emerald Bay home for $28 million •$10 million discount offered for Balboa home •Orange County’s 10 priciest home sales •Mall getting $100 million makeover •Realtors report 10% jump in O.C. house prices •Could be worse! LA/OC housing ranks 88 of 100 •Builder’s losses entering 3rd year •Fed trims emergency lending •Mortgage applications rose on dip in rates •Foreclosures create opportunity for HOA firm •Agent: Short sales now go ‘a lot faster’ •Can you make $$ as an Irvine landlord? •Lose your job? These folks can pay your mortgage Posted in: Home prices • Top tale • First American • numbers | You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed. 10 Comments

Frenzied bidding at courthouse as blogged by Matthew Padilla

Mike Kelly (First Team Real Estate) — Mon, 29 Jun 2009 02:13:18 -0700

Investors announced bids within seconds of each other on some steeply discounted foreclosures auctioned on Friday in front of the Santa Ana Courthouse. I attended the trustee's sale to gauge investor interest these days and to see if the state's foreclosure moratorium, which began earlier this month, is having any impact. Whenever I attended auctions in 2007 and 2008, investors generally passed on properties. But on June 26 they jumped on houses and condos with discounts of greater than $100,000 on the debt and fees owed on each property. For example, at least four people bid on a two-bedroom house in Anaheim on Zeyn Street. Winning bid: $206,000. Amount owed before foreclosure: $565,000. Discount: $359,000. (Amounts are rounded to 1,000, and I assume amount owed is on first mortgage. There could be more liens against the property, but they should be eliminated by the auction.) The discount is what the bank is willing to accept; it's not directly related to the current market value, though I am sure the bank has a ballpark value in mind when it decides how much to accept. Zillow estimates the Anaheim house is worth about $301,500. At trustee's sales, properties are sold as is, meaning there could be property damage and the owner, or former owner, may have to be evicted. Another risk is if there are competing foreclosures nearby. I checked ForeclosureRadar and here are other foreclosures or potential foreclosures within less than a mile of Zeyn Street. The map shows five bank-owned properties (red dots) and many more notices of default (green dots) and notices of trustee's sale (blue dots). The map suggests dozens of potential foreclosures. A few other examples: Another property in Anaheim, a condominium on South Walnut, sold for $154,000, 57% off the debt owed of $358,000. At least three investors bid on it. Two investors went after a two-bedroom condo in Aliso Viejo, repeatedly raising bids by increments of $100 or $1,000. It finally went for $293,500 - but despite the heated interest that price was 35% off the debt of $452,410. Zillow says its worth $315,000. A property on West Sunflower in Santa Ana went for $110,500, close to a third of $319,663 owed. What about the state's 90-day foreclosure mortatorium? Well as I said previously, dozens of lenders and loan servicers have already received permanent or temporary exemptions. They just need to show they are currently modifying loans. With that said, many foreclosures appear to be repeatedly delayed. More than 200 properties were originally scheduled for auction on Friday, but the day before I counted just 94 still scheduled for June 26. The auction started at noon and two hours later only about a dozen had been auctioned, with more than half going back to the bank. I had enough and left. However, I plan to attend once a week or so, and am happy to meet any blog regulars at an auction. One last thing, of the 94 scheduled for Friday nine owners had filed for bankruptcy, roughly 10%, which suggests the foreclosure had been previously delayed

Lansner on County taxes.

Mike Kelly (First Team Real Estate) — Mon, 29 Jun 2009 02:10:54 -0700

The Orange County Assessor's Office reports that more than 179,200 houses, townhomes and condos will be spared property tax hikes next fall and spring thanks to falling home values here. Guillory Some of those homeowners will see their taxes stay the same, but the majority will get a tax cut. For houses and townhomes, the average tax savings will be around $1,400 in the 2009-10 tax year, said Assessor Webster Guillory. The average reduction in the assessed value for those homes will be about $120,000. For condos, the average tax savings will be $1,000 thanks to an average reduction in assessed value of about $80,000. A large number of homes will see their taxable values drop for a second year in a row, Guillory reported. The average drop in value for the past two years was about $195,000 for houses and townhomes and about $150,000 for condos. The assessor's office reviewed the taxable values of more than 280,000 homes and commercial properties in the county. All homes sold between 2002 and 2008 were reviewed, Guillory said.

Scott Smith joins the Mike Kelly Team!

Mike Kelly (First Team Real Estate) — Mon, 29 Jun 2009 02:04:38 -0700

Scott Smith joins the Mike Kelly Team Veteran award winning agent Scott Smith of Prudential California Realty has recently joined the Mike Kelly Team. "In the most difficult real estate environment in our lifetimes, Scott has continuously demonstrated an intellectual level of professionalism that is respected by his peers, clients, and customers", states team leader Mike Kelly. "As the market conditions continue to improve Scott will excel to even greater heights of success because he works diligently, never complains, and takes the time to understand, qualities that we all strive for", added Kelly. "For the past several years I've observed closely how Mike Kelly has built his exceptional team of individuals into one of the top producing teams in the Prudential California Real Estate organization, not to mention Orange County, as the Mike Kelly Team was # 1 in sales units for our company in Orange County for 2008. When Mike introduced the ‘auction' method of selling properties, combined with ‘bank-owned' under the direction of Mike Vartanian, ‘short-sale', equity sales, among other points of his team's 10 point business plan....combined with the extra-ordinary support of Prudential California Realty's marketing department under the direction of Maria Hill, as well as our office manager Karen Westmoreland and her staff, I knew this was the right move at the right time; stated Smith. "I plan on introducing all my clients to Jim Nelson and Premier Home Auctions as a way to maximize the results on the sale of their properties in the shortest period of time while eliminating the ‘hassle' of showings at all times of the day, weekends and evenings.....it is a real thrill for me to be accepted among the upper echelon of veterans in the real estate industry, concluded Scott Smith, when asked why he wanted to grow his business when many agents and company's have scaled back? "In two previous management assignments I was fortunate to support and observe the development of Scott's career. He grows in service to his clients with each experience, individually tailoring solutions that are timely, skillful, and results-oriented. Knowing his dedication to our profession, the future is very bright for Scott, it is among my career highlights to have Scott working with us again".....quoted Blake A. Vartanian, Mike Kelly Team coach and partner. Scott, his wife Sharon, and children are residents of Fullerton. To reach Scott Smith please contact him at (714) 401-1401 or by e-mail at scott.smith@mailpcr.com. The Mike Kelly Team members are Mike Kelly, Mike Vartanian, Karen Carlson, Michele Dizon, Jim Nelson, Nancy Nelson, Byron Nelson, Brian Kelly, Dick Crawford, Becky Conners, Scott Smith and Blake A. Vartanian. For more information please call Mike Kelly at (714) 422-8520 or e-mail at mikekelly@sbcglobal.net.

Going once, Going twice.....for the third and final time!

Mike Kelly (First Team Real Estate) — Fri, 26 Jun 2009 02:23:51 -0700

Crystal Sands in Laguna Niguel has sold "All Cash" for $477K. 8616 E. Canyon Vista in Anaheim Hills sold also, its sales price at $616K....according to the MLS it is day 10 today....it went into the MLS last Friday....so the real ‘days on market' is 7 (Friday-Thursday)......congratulations to all involved....this makes 7 sale sides on the month going into our ‘auction' weekend with 7 more properties ready to be ‘sold'. The other 5 sales are Paseo El Greco, Heatherwood, Quiet Canyon, Nordic (which already closed) and Autumn. As I'm typing this....the office radio is on, K-earth playing "Got to be there" and "Billie Jean" by the late Michael Jackson....an amazing talent at the top of his game in years gone by.....growing up at the same age it was impossible to not wish that I could ‘sing' like him....who didn't.....we have never witnessed such a ‘marketing' and phenomenal success....he changed through the years to someone not relatable to me....but the early days to Thriller.......there is no denying the ‘kid' could sing....and bring joy to a world that needed to ‘escape' for a few minutes.....may Michael, Farrah Fawcett, and Ed McMahon each in their own way find eternal peace in the life hereafter....as Bob Hope used to say and sing..... "Thanks for the memories". Going once, going twice, for the third and final time....our big weekend has arrived...let's sell some houses......and replace them with new listings for the next auction date.....

The appraisal mess and Foreclosures!

Mike Kelly (First Team Real Estate) — Thu, 25 Jun 2009 02:42:09 -0700

The Home Appraisal Mess Posted Jun 25, 2009 09:55am EDT by Joe Weisenthal in Newsmakers, Recession, Housing From The Business Insider, June 25, 2009: We've been talking this week about the NAR's war against what it claims are low-ball home appraisals, caused by new regulations, and outside appraisers using distressed and foreclosure sales. Real estate appraiser Jonathan Miller is weighing in on the question, and finds some merit to the idea that there are problems with current appraisal methods. But first, he thinks it's ridiculous to dismiss distressed and foreclosure sales as being somehow irrelevant, since the market is the market. If a home seller has to compete with other homes that are being foreclosed upon, then them's the breaks, and that does legitimately drag down the value of a home. Where Miller sees some merit in the complaints is the idea that un-qualified appraisers are sloppily comparing a house to a recently foreclosed house, without actually confirming that the houses are the same, or should be in the same ballpark. We already are required to verify the sales to be able to make adjustments but the Cuomo/Fannie Mae deal called Home Valuation Code of Conduct (HVCC) has enabled a whole army of inexperienced or incompetent appraisers at the expense of competent experienced appraisers who can't afford to work for half price and turn around assignments in 20% of the time without verifying the data. I was told by a senior risk officer at a national lender that the bank uses several hundred appraisers in Manhattan. There are less than a half dozen long-time Manhattan-based firms here (with more than 1 employee). Where do all these companies come from? Out of state and up state New York. These appraisers will drive 3-4 hours to come to bang out a dozen reports in a day working for half the market rate. Now, bear in mind again that Miller's got a vested interest in this point, not wanting to see an army of outside appraisers coming in, doing the work at half the price. But on the whole he's still critical of the NAR and National Association of Home Builders for what he says are dishonest attempts to fight honest, appraisals. More: What about a neutral middle ground? Good grief. "In neighborhoods where comps include a large number of short sales or foreclosures, appraisers should have the option of expanding the geographic area or extending the time frame for eligible sales to get a more representative basket of the value of homes sold in the area, Robson added." They basically want appraisers to ignore all foreclosure sales because they are "low" and be allowed to expand search guidelines to find higher sales. Property values in a neighborhood that are hurt by rising foreclosure activity isn't caused by appraisers. They are competition to the non-foreclosure homes (and should be properly adjusted for condition). If the appraiser is determining market value of a property, he/she can't cherry-pick the high sales. Their logic is a fall-back to credit boom reasoning which was all about finding the highest sales to make the deal happen. "Currently, improper or insufficient adjustments to the comparable values of foreclosed and/or distressed homes often results in the undervaluation of new sales transactions.: The best message in this release and it is absolutely true. Condition of the comps should be discovered and adjusted for. Otherwise they aren't comps - they are merely sales. Read the whole thing, and bear in mind what a commenter said yesterday. EVERYONE in this environment is fighting for every bit and scrap they can, and almost everyone is contorting logic to get there. As long as politics is the arbiter of so many markets -- rather than just the market itself -- a group's ability to marshal support and contort the evidence will be key to their success. See Also: NAR Chief Blames Objective Appraisers for Keeping Home Sales Down Why Did New Homes Sales Go Down When Existing Home Sales Improved?

Scott Smith announced as new Mike Kelly Team member.......

Mike Kelly (First Team Real Estate) — Thu, 25 Jun 2009 02:15:34 -0700

Today it is an honor and privilege to officially welcome our friend and colleague ‘Scott Smith' to the Mike Kelly Team. For those of us who have the honor of knowing Scott during the past several years, let there be no doubt about his sincere desire to become a top producer among us, while building on our mutual relationship(s). We are very pleased to have earned Scott's ‘trust' in the ability to grow our shared business. Below is Scott's listing at 8160 E. Woodsboro in 92807 (see below for details) which will become an MK Team listing....here's to the future! Welcome Scott. Yesterday, since everyone available on the team including all ‘Preview Associates were provided opportunities for the auctions", we invited other agents in the company to hold open two listings on Canyon Vista (8616 which is ours and 8606 which is listed with Goodman/Dean), who gave us permission....a ‘bank owned'....allowing us to place that many more "MK Team" signs for the final ‘Preview Wednesday" for Saturday's auction properties.....by thinking/taking action steps ‘outside' the box. We took possession of ‘bank-owned' 2423 Chain in Anaheim Wednesday. This is a 3/2, single story detached house...farming tomorrow at 7:30 am.... Let's rock!......Mike

SFR

Detached

RES

Active

8160 E Woodsboro Ave

Anaheim (ANA)

Price $625,000*


Anaheim N of River, E of Lakeview (93)	Zip 92807-2519	TGNO 740J6
Orange County (OR)	XSTS LaPalma/Wier Cyn/Yorba Linda Blvd	Aerial Map

P687424	Media: 7	Builder Tract Other (OTHR)
Bed 4	Model (0)
Baths 3	Style Contemporary/Modern	Stories Three or More Levels	Floor
View No View	HOA Dues $ 0 + $ 0	Land Lse/Yr $
ASqFt 2,393 Assessor	YrBlt 1977 Assessor	Land Fee
ALotSize 6,480 Assessor	Dim 55x110	Acres 0.15
Prkng
Garage, # cars 2	Rem	# Uncovered Spaces	Cprt	# Garages	RV Acc	Range $: No

LOCATED IN ESPERANZA HIGH SCHOOL DISTRICT! GREAT FAMILY NIEGHBORHOOD AT THE EDGE OF YORBA LINDA WITH A GREAT PRICE, AND VERY MOTIVATED SELLERS. LARGE SPACIOUS FLOORPLAN, FIREPLACE IN FAMILY ROOM, INSIDE LAUNDRY, FORMAL LIVING ROOM,AND DINING ROOM, NICE TILE ,WOOD FLOORS AND BRAND NEW DESIGNER CARPET.THIS HOME HAS ALOT TO OFFER AND IS NOT A SHORT SALE OR REO.

Directions west of Wier Cyn/ Yorba Linda Blvd on Lapalma, North on Jennifer to Woodsboro, turn right to property.

Rooms

Bedrooms Master Bedroom Balcony

Living Rm Living Rm Entrance

Kitchen Open to Family Room

Dining Family Kitchen, Formal Dining Rm

Total Baths 3

Full Baths 1

3/4 Baths 2

1/2 Baths 0

1/4 Baths 0

Baths Desc Double Vanity(s)

Other Family Room, Inside Laundry

Fed agrees to maintain purchase of securities.....

Mike Kelly (First Team Real Estate) — Wed, 24 Jun 2009 08:32:31 -0700

The Federal Reserve today said it will continue to buy up to $1.25 trillion in mortgage securities by the end of this year and that it is maintaining its target for a benchmark interest rate at between zero and 0.25 percent. Some market watchers have hoped the Fed would buy more securities than previously announced to push down mortgage rates, which are above 5%. But the Fed also has to face concerns a $1 trillion expansion of its balance sheet over the past year to $2.07 trillion will fuel inflation, drive up interest rates, and hamper any potential economic recovery. The Fed said: The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted. Read the full statement HERE. by Matthew Padilla of the OC Register.....

The priciest OC Homes as published by Jeff Collins in the OC Register

Mike Kelly (First Team Real Estate) — Wed, 24 Jun 2009 08:23:10 -0700

As reported in the Register's South Coast Homes blog, a luxurious beachfront property along Emerald Bay's "street of gold" closed escrow two days ago for what could be the third-highest sale price in Orange County history. It also could be just the ninth home in the county to fetch more than $20 million. According to the Multiple Listing Service, 106 Emerald Bay sold for the asking price of $32,995,000, according to Register blogger Kelli Hart. Be aware, however, that prices specified in the MLS aren't always accurate. Still, homes along that strip of beachfront land are among the most valuable residences in Orange County. The property at 106 Emerald Bay is just three doors away from Crested Wave, which is O.C.'s second-place property with a sale price of $34.5 million. So (drum roll, please), here's a countdown of the top 10 sales prices ever paid in O.C., based on county records: No.1) Bayshore Drive, Newport Bay: $35 million paid by Jerry Herbst, owner of Las Vegas-based Terrible Herbst, to actor Nicolas Cage in January 2008. No.2) Crested Wave, in Laguna Beach's Emerald Bay: $34.5 million paid by Louis Welch who is president of Irvine-based LA Fitness International LLC in February 2008. No.3) 106 Emerald Bay, Laguna Beach: Reportedly for just under $33 million. We're still checking on that price. No.4) Riviera Drive, Laguna Beach's Irvine Cove: $30.1 million, July 2007. No.5) Riviera Drive, Irvine Cove: $29 million, March 2005. No.6) Hale O Pau Hana, Corona del Mar: $27.1 million, April 2008. No.7) Sugarloaf Point, Laguna Beach: $25 million, sold in the spring of 2007 by Supermarket magnate Ron Burkle, who built the home on a site once owned by the late singer Ricky Nelson. No.8) Riviera Drive, Irvine Cove: $23 million, May 2006. No.9) Cotton Point, San Clemente: $21 million, November 2006, located on the grounds of President Nixon's former Western White House. No.10) Master's Circle, Newport Coast's Pelican Hill: $19.5 million, paid in November 2006 by Henry T. Nicholas III, the billionaire co-founder of Irvine's Broadcom Corp. who currently is facing federal charges of securities fraud and drug trafficking. Note that five of the top 10 homes are located on two beachfront strips in north Laguna: Riviera Drive and Emerald Bay. Note also that four of those homes have sold in the past 1 1/2 years. What slump? There may be other homes that have changed hands that we haven't heard about yet (drop us a line if you know of one). There also are many other homes that are for sale with higher asking prices or that are more valuable, but just haven't been on the market for awhile. To learn more, visit our priciest homes map: HERE! Related news ... Laguna home sells for $32.9 million as 3rd priciest O.C. sale O.C.'s newest beachfront listing: $36.9 million O.C.'s "street of gold" Flash map of "street of gold" New Emerald Bay home to be worth up to $50 million O.C. home reportedly goes for record $35 million $34.5 million Laguna home is O.C.'s second priciest sale Glass elevator highlights $34.5 million house Mansion will now cost you $77 million $75 million sale not on record

7 lenders escape state foreclosure moratorium!

Mike Kelly (First Team Real Estate) — Wed, 24 Jun 2009 02:06:58 -0700

Matthew Padilla of the OC Register Blogs..... "7 lenders escape state foreclosure moratorium" Bank of America, Citigroup and EMC Mortgage Corp. are among seven companies that have received permanent exemptions to California's 90-day foreclosure moratorium, which began last week. More than 20 other lenders and loan servicers, including Wells Fargo and JPMorgan Chase, have received a temporary exemption while they wait to learn if it will become permanent. Here's what I wrote previously on the law: The California Foreclosure Prevention Act, or Assembly Bill X2 7, which Governor Arnold Schwarzenegger signed in February, is meant to push banks and loan servicers into lowering mortgage payments of homeowners in financial trouble. It reflects a similar federal plan. Several companies have already applied for exemptions, said Mark Leyes, a spokesman for the state's Department of Corporations. The department must grant or refuse an exemption within 30 days, during which companies need not comply with the moratorium. The law impacts loans made from 2003 to 2007. A lender or servicer gets an exemption by demonstrating it already has a loan modification program in place, including lowering owner payments to a target of 38 percent of their income going to housing. Methods of choice are lowering the loan's interest rate or extending its term to 40 years. The bill, however, seems to lack teeth. The 38 percent debt-to-income ratio is merely a target. And the bill says it does not require a servicer to violate contracts for "investor-owned loans." The most troubled loans are generally those investment banks packaged and sold, and if the servicing contract says foreclosure is preferable to a loan modification, nothing in the law stops foreclosure. Exemptions are granted by the three agencies that regulate companies that make service or broker loans. See the California Department of Corporations exemptions list HERE. The Department of Real Estate list HERE. And Department of Financial Institutions list HERE. End of his entry....... With regard to our auctions....offers ‘flying' this week.....multiple offers on the Marbleheads....Tisbury & Ludwig (expected today).... We can see the advantages of having an ‘end' date to a process backed by an aggressive marketing plan....people need to move to the ‘decisive' category if they want to ‘play' the game. Speaking of decisive, Autumn sold yesterday with a large stack of offers on hand....5 days as planned....excellent work....we received the first offer on Canyon Vista....and a listing appointment in Chino Hills from our Nordic mailer....that'll take place tomorrow.....we were assigned another ‘bank owned'.....a house in Diamond Bar that is tenant occupied....today we take possession of a ‘bank owned' house in Anaheim assigned previously.... Today is the last "auction preview" for Saturday's main event......the anticipation is building.....this is tremendously exciting...... "Notoriety and a fat bank account must come after everything is finished and done", Ray Bradbury (1920- ) American Author.

A blog sampling from Matthew Padilla of the OC Register posted June 22nd and 23rd.....

Mike Kelly (First Team Real Estate) — Tue, 23 Jun 2009 02:22:55 -0700

Remember those loans for 125% of the value of a home? That's what comes to mind with this from National Mortgage News (hat tip to broker Lou Pacific): The 105% loan-to-value ratio limit on Fannie Mae and Freddie Mac's program to refinance underwater borrowers could be raised to increase participation, according to the GSEs' regulator. The Federal Housing Finance Agency is "looking at going significantly higher than 105%," FHFA director James Lockhart said. The 105% ceiling has kept too many borrowers on the sidelines, he told a National Association of Real Estate Editors conference. The GSEs have refinanced 80,000 homeowners under the special program that the Obama administration has promoted to help borrowers who can't qualify for a standard refinancing. The administration unveiled the refinancing program in February and estimated it will refinance at least 4 million homeowners who have loans that are owned or guaranteed by the government sponsored enterprises. The 105% LTV limit theoretically allows Fannie and Freddie to securitize the newly refinanced loans and sell them to the Federal Reserve and other investors. However, raising the LTV might force the GSEs to hold the loans on their books. ------------------------------------------------------------------------------------------------- Recently foreclosed homes, most of them likely being sold by lenders, are taking up a decreasing portion of Orange County real estate transactions, DataQuick's latest figures show. In May, homes that had been foreclosed upon in the previous 12 months made up 34.2% of homes sold, excluding newly built home sales, DataQuick reported. That's the lowest percentage since August. Foreclosure's share of the home resale market peaked in January at 46%. Lenders repossessed more than 1,400 Orange County homes last August - the highest number of any month on record. The increase in re-sales of foreclosed homes followed, but began to subside in February. One reason is likely that foreclosures fell in September and subsequent months amid a state law requiring banks to talk to delinquent borrowers at least 30 days before filing a notice of default, which starts the foreclosure process. The law impacts loans made in the final years of the housing boom. And some agents specializing in selling bank-owned homes have speculated that lenders are withholding a large number of foreclosures from the resale market, making it likely that many more foreclosed homes will show up later. (For more on foreclosure trends, click HERE or HERE.)

Signs of the housing market?

Mike Kelly (First Team Real Estate) — Mon, 22 Jun 2009 09:45:00 -0700

The U.S. housing market will rebound eventually, according to a Harvard University report. Demographics and under building are conspiring to up demand and revive home prices. But that day still is a long way off, perhaps not until sometime after 2010, the university's Joint Center for Housing Studies said in its 2009 State of the Nation's Housing report. For now, the housing center said: "Clear signs of a recovery have yet to emerge, and job losses and the steady stream of foreclosures are keeping many markets under pressure. Sales of both new and existing homes continued to struggle to find a bottom through April." The annual state of the nation's housing report - largely a review of data through 2008 - told us mostly what we already know: that housing market conditions deteriorated last year. Specifically: Housing starts were down more than 50% from 2005, the year the boom ended. Manufactured housing shipments decreased for a third consecutive year. Demand for new homes fell faster than production, resulting in a record supply of 12.4 months by January. Sales of existing single-family homes fell 30% from 2005. Sales improvements largely reflect purchases of foreclosed properties at fire-sale prices. Foreclosed homes accounted for a third of all existing home sales in the fourth quarter of 2008. According to the housing center's press release: "First-time homebuyers are struggling to meet today's stricter underwriting guidelines, household growth is well below long-term trends, and immigration has slowed; as a result, the share of homes for sale and vacancies stand at near record levels despite sharp decreases in housing production." The silver lining? Children of baby boomers, the "echo boom," will be of age to form independent households in coming years, so that household growth from 2010 to 2020 will rival the decade of this past boom from 1995 to 2005. Read the press release for Harvard's 2009 State of the Nation's Housing Report: HERE! Read the fact sheet for the 2009 State of the Nation's Housing Report: HERE! Read the 2009 State of the Nation's Housing Report: HERE! Posted by Jonathan Lansner of the OC Register....6/20 12:01 am

A Father's Day success!

Mike Kelly (First Team Real Estate) — Mon, 22 Jun 2009 01:49:16 -0700

This week, June 27th & 28th the Mike Kelly Team will sell 7 ‘auction' properties in excess of $10 million in the aggregate. Wishful thinking? No! Part of a deliberate plan; each ‘auction' property will sell this Saturday or Sunday; or placed into a category entitled "Sold, subject to seller's confirmation". Notice the word "failure is not associated with either outcome. Certainly ‘success' is far from a foregone conclusion. We have received more attention for this effort than anything we've done in recent times. Supported by advertising in the OC Register, LA Times, Pennysaver, direct mail, e-mail blasts to 1600 agents....over 200 web/on-line sites...preview open houses held by the team......Jonathan Lansner/Jeff Collins Register Blog; etc......our efforts have stirred a tremendous curiosity and interest.....there is still a lot left to be done... Yesterday I held open 905 W. Autumn; in Anaheim....recently converted from ‘bank-owned' to investor sale....this 1268 square foot re-furbished 3 bedroom, 2 bath sits just off West Street (West of Harbor/South of La Palma), the water district pumping station/storage tanks back the property....very peaceful w/nice neighbors. Promoted as open from 12 to 2...wasn't sure what Father's Day traffic would be like...with 8 signs placed by 11:40 am....17 people (5 groups) were in and gone by Noon....the onslaught was just beginning....consistently for over 21/2 hours I never had an empty house....with as many as 8 or 9 groups in the house....I project 80 groups and over 200 people came through...counting toddlers, infants, tire kickers, curiosity seekers and neighbors....and even a ‘few' who thought it unfair that ‘capitalism' was on full display with the ‘flip' of the house by investors. They were explained the merits of ‘free enterprise'.....then dismissed for other opportunities. At 2:15 pm I politely asked the remaining 4 groups to please head towards the door to complete their conversations outside....as another group entered...finally gaining possession of an empty house, headed for the car....as the car rolled down the driveway some lady came up and hit my passenger side window, ‘yelling' to get my attention....smiling from ear to ear I proceeded down the road knowing it was a terrific ‘Father's Day' open house; we already have 4 offers....two over full price....in the first 48 hours on the market......the asking price of $334,900 proved to be a successful decision for the seller....with tomorrow the day the sellers will pick the winning offer....we'll sell at least 8 properties this week.....whether outright or subject to sellers confirmation...it's just another ‘contingency'. "So what if you fail? At least you'll know what not to do when you try again", Venus Williams (1980- ); 5 time Wimbledon Champion. Mike V. had very heavy traffic on the first open house at the spectacular offering on 8616 Canyon Vista; Anaheim Hills...both properties hit the MLS June 19th...... Entry offered by Team member Blake Vartanian

The official start of Summer!

Mike Kelly (First Team Real Estate) — Mon, 22 Jun 2009 01:47:02 -0700

The start of summer...... (edit/delete) Summer officially started Saturday night around 10:45 pm PST. Father's Day is the first full day of summer....my best is offered to all ‘Fathers" in celebration.... This week was particularly interesting; as we built momentum towards the big auction days next weekend....Saturday the full page ad ran in the LA Times real estate section page 7; the public relations supporting it can be found on page 14....the first PR story in the section....we also enjoyed the placement of four properties on the cover and inside cover....the ad insert went to all 22,000 households in Anaheim Hills and Villa Park promoting the auction via the Times or US mail for non-subscribers on Friday....both will be repeated next week. I saw Byron was getting the e-blast out there. This coming Thursday all 7 ‘auction' properties will be prominently featured in the company Register advertising.....of course we all saw Lansner's blog in the Register featuring the auction. Heatherwood & Quiet Canyon followed Paseo El Greco into escrow....counting Nordic which also closed, that gives us 4 sales in June.....8616 E. Canyon Vista, AH; and 905 W. Autumn, Anaheim went ‘active' as new listings this week....both look ‘spectacular'. As we prepare for the final ‘preview' open houses in our last week before the auction....we can be grateful for the ‘teamwork' demonstrated in the most challenging of times.... "The great thing about tomorrow? I can be better than I am today", Tiger Woods......1975....one year ago this weekend he won the US Open on a broken leg in two places and a torn apart knee....at Torrey Pines in San Diego....this year the Black course at Beth Page....and a Monday finish.....

The start of summer......

Mike Kelly (First Team Real Estate) — Sun, 21 Jun 2009 10:19:01 -0700

Summer officially started Saturday night around 10:45 pm PST. Father's Day is the first full day of summer....my best is offered to all ‘Fathers" in celebration.... This week was particularly interesting; as we built momentum towards the big auction days next weekend....Saturday the full page ad ran in the LA Times real estate section page 7; the public relations supporting it can be found on page 14....the first PR story in the section....we also enjoyed the placement of four properties on the cover and inside cover....the ad insert went to all 22,000 households in Anaheim Hills and Villa Park promoting the auction via the Times or US mail for non-subscribers on Friday....both will be repeated next week. I saw Byron was getting the e-blast out there. This coming Thursday all 7 ‘auction' properties will be prominently featured in the company Register advertising.....of course we all saw Lansner's blog in the Register featuring the auction. Heatherwood & Quiet Canyon followed Paseo El Greco into escrow....counting Nordic which also closed, that gives us 4 sales in June.....8616 E. Canyon Vista, AH; and 905 W. Autumn, Anaheim went ‘active' as new listings this week....both look ‘spectacular'. As we prepare for the final ‘preview' open houses in our last week before the auction....we can be grateful for the ‘teamwork' demonstrated in the most challenging of times.... "The great thing about tomorrow? I can be better than I am today", Tiger Woods......1975....one year ago this weekend he won the US Open on a broken leg in two places and a torn apart knee....at Torrey Pines in San Diego....this year the Black course at Beth Page....

Social networking comes of age......

Mike Kelly (First Team Real Estate) — Thu, 18 Jun 2009 05:22:00 -0700

June 14th, 2009, 12:08 am · 5 Comments · posted by Jon Lansner/ocregister.com sOCial sunday will frequently explore a real estate angle to blogging, Twitter, etc. Today, Orange County entrepreneur Greg Robertson of Dwellicious.com offers his thoughts on how should a real estate agent or a brokerage should initially approach “social networking” tools … Blogging? I think that starting a blog is one of the best ways for an agent today to show off their personality — but also their knowledge of the local market. Both are important in real estate. I’m also a big believer in creating a niche for yourself. So starting a blog about goings on of the neighborhood you sell is a great way to get started. Market data is available everywhere now and something you should provide. But it’s the stories about the neighborhood; who’s moving in, why this house sold for that, garage sales, softball schedules for the local park, etc. You want to be the place on the web that everyone in the neighborhood goes to find out what’s going on. The challenge here is that not all people like to write or write well. But some of the best blogs I read are just a collection of links to other stories, with maybe a brief (one or two sentence) commentary. It can be done. Digg, de.licio.us and other bookmarking services? It’s all about sharing. There are technical things agents and brokers can do to make it easier for people to share/bookmark posts/content on their blog or website. But the real question is whether or the not the information/knowledge you are putting out is actually worth sharing. That being said, agents and brokers need to be aware that today’s consumers use sites like Digg as a news source and de.licio.us as an alternative search engine. Ranking high on either of these services will give you great exposure. LinkedIn, Facebook and other contact networks? One of easiest ways to get started in social networking is creating a profile on LinkedIn — often been described as Facebook for business. A lot of real estate professionals are uncomfortable with the “social” aspect of social networking site, LinkedIn keeps it nice and professional. It’s like your resume on the Web. It gives you an opportunity to talk about your background, qualifications and career. I know a lot of people who check LinkedIn first before doing business with someone. Facebook would be the next step, but some people are put off by the banality of it. I look at Facebook another way. It’s kinda of like what TIVO does for me. I can see what my friends and family are doing, on my own schedule. Twitter? I really like Twitter. Like Facebook, a lot of people are put off by it: “Why would I ever tell people I’m having a cup of coffee?” For me Twitter is the entry point for the social networks I belong too. I link Twitter to my Facebook accounts so my “tweets” also updated my Facebook account and also viewable on my blog. For agents and brokers, Twitter can also be an extention of their blog/website, a way of getting the word out. Again, the focus must be: “Is what I’m sharing, worth sharing?” That’s the best mantra for anyone trying to leverage the power of social networking in their business. [ MORE: TWITTER | MOBILE | JON | QUESTIO

The overall role of financing.....

Mike Kelly (First Team Real Estate) — Thu, 18 Jun 2009 01:46:40 -0700

The world of finance continues to change. Lenders and the requirements for 'borrowing' are diminishing the 'overall' capacity of consumers to enjoy the standard of living we previously were accustomed too. One day in the not to distant future this period will be reflected upon as one of the greatest transfers of wealth in history. In our part of the real estate equation we play a significant role in shaping the future successes of our client's sales and purchases....regardless of the 'rules' imposed on us....we must remain diligent in our quest to grow our business and succeed beyond any level imaginable...through our professional delivery. "Dad's wallet has picture's where his money used to be"...is the basic quote on the marquee display in front of the church at S. Ohio and Yorba Linda Boulevard's in Yorba Linda..... Having played the role of "Dad, the human ATM machine"....the money is replaceable...the pictures I don't keep in the wallet, for they are truly priceless....Mike

100 billion dollars of worthless junk bonds.....

Mike Kelly (First Team Real Estate) — Wed, 17 Jun 2009 09:06:27 -0700

meant to post earlier this interesting item from National Mortgage News: Two-thirds of the AAA-rated private-label MBS purchased by Fannie Mae and Freddie Mac have been downgraded to "junk," the GSEs' regulator told a congressional panel, and only a small portion is still rated AAA. Federal Housing Finance Agency director James Lockhart told a House Financial Services subcommittee the two government sponsored enterprises have $171.3 billion in PLS backed by alt-A, subprime and other mortgages in their investment portfolios. Only 3% remain AAA and not on downward watch, Mr. Lockhart said. Another 11% remain AAA-rated but are on downgrade watch as of May 28. Meanwhile, 68% of the private label-MBS has been downgraded below investment grade, which is sometimes referred to as "junk" bonds. An additional 17% has been downgraded but remain investment grade, according to FHFA. "There is no doubt [the credit rating agencies] failed" in rating these securities," Mr. Lockhart said at the June 4 hearing. "We need to reform the rating agencies and we need to get them back to rating and not consulting and getting fees for structuring bonds," he said. Impairments on the MBS resulted in Fannie recognizing $6 billion in losses in the first quarter and Freddie recognizing $7 billion in losses." Lockhart may be correct about the rating agencies, but why were Fannie and Freddie buying so many securities packaged by Wall Street banks? The defense I have often heard is that the GSEs thought buying subprime securities helped low-income buyers afford housing. But isn't that the purpose of FHA? Besides which it was unnecessary - there was plenty of investor demand for anything AAA. And to explain the headline, the GSEs are in federal receivership. Matthew Padilla of the OC Register posted this on 6/16

Investors snapping up foreclosures at 34% discount at the court house!

Mike Kelly (First Team Real Estate) — Wed, 17 Jun 2009 09:02:46 -0700

Banks accept 66% of debt value at foreclosure auctions June 17th, 2009, 12:05 am · 4 Comments · posted by Mathew Padilla Banks on average were willing to take a 34% discount against the first mortgage on an Orange County property at foreclosures auctions, known as trustee's sales, last month, ForeclosureRadar.com reported yesterday. Although the discount was up from 32% in April and 23% in May 2008, it has been mostly flat this year. The average discount shot up early last year as foreclosures mounted. During the housing boom, banks generally did not offer discounts. Investors buy a small portion of homes auctioned at trustee's sales in Orange County despite the hefty discount. There are several reasons: Even with the discount, the bank may still be asking more than a property will fetch if an investor quickly resells it - especially including costs to prepare it for resale. An investor may have to evict the former homeowner. There could be property damage. Properties are sold "as is" at auctions. To see my previous post on ForeclosureRadar showing a plateau in foreclosure filings, CLICK HERE. And read about California's 90-day foreclosure moratorium HERE.

May foreclosures increase......

Mike Kelly (First Team Real Estate) — Wed, 17 Jun 2009 08:59:27 -0700

DataQuick reports banks seized 591 houses and condos in May in Orange County, up 22.6% from April but down 47.7% from a year ago. The chart (click on it for larger image), which I first published over the weekend, shows annual countywide foreclosure totals - I used year-to-date total for 2009 - and annual unemployment rates for O.C. - I used April's rate for 2009. It shows that the unemployment rate rose first and then foreclosures in the '90s. But foreclosures fell in the early 2000s even as unemployment rose. Low interest rates and rising home prices reduced foreclosures. The chart suggests a lot more foreclosures are coming. However, if one looks at monthly totals (see table below), foreclosures fell 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. Some experts say the law only delayed foreclosures, and they also say a statewide 90-day foreclosure moratorium, which began Monday, lacks teeth. Loan servicers can apply for an exemption to the moratorium by showing they are already doing loan modifications. State and federal data show banks are doing more loan modifications these days, which could explain why foreclosures remain below the peak level of 2008, when banks were seizing more than 1,000 homes per month in the county. Yet federal data also show borrowers are re-defaulting more than half the time after getting a modification. Default notices also fell amid the September law, but have since rebounded. Banks filed 2,590 such notices last month, down 12.1% from April but up 4.9% from a year ago. Banks typically file an NOD, which starts the foreclosure process, after a borrower misses three or more monthly payments. To see pricing and sales data from last month, CLICK HERE. And the following table shows defaults and foreclosures (Forec.) going back to 2007: Year200920082007

Month	Defaults	Forec.	Defaults	Forec.	Defaults	Forec.
January	2,200	835	2,352	802	847	152
February	2,742	770	2,254	733	811	164
March	3,485	541	2,476	698	986	204
April	2,947	482	2,598	898	855	234
May	2,590	591	2,468	1,131	1,021	276
June			2,498	1,213	1,108	311
July			2,337	1,362	1,167	367
August			2,484	1,441	1,476	469
September			871	1,194	1,239	444
October			925	737	1,448	530
November			1,205	633	933	364
December			2,351	718	1,895	644
TOTAL	13,964	3,219	24,819	11,560	13,786	4,159

Median OC price jumps back over $400K.....

Mike Kelly (First Team Real Estate) — Wed, 17 Jun 2009 04:45:47 -0700

Quick glance at final May stats from DataQuick for Orange County homebuying show a $410,000 median selling price, highest in 7 months and 15.5% off a year ago. Shoppers bought 2,667 residences, that 17.7% above a year ago - 11th consecutive year-to-year gain and also a 7-month high. ShareThis Posted in: Top tale | Post a Comment » Chapman sees O.C. home prices up 1.6% in 2010 June 17th, 2009, 9:03 am by Jon Lansner/ocregister.com Click to enlarge Chapman U. econ professors have their semiannual Orange County forecast out. Here's the real estate scoop: Orange County's median family income runs $78,500 for 2009, so a potential homebuyer needs to allocate 27.4% of income to buy a median-priced home in Orange County vs. 48.4% in 2006. Smaller inventories, improved affordability and diminished supply of new homes cannot overcome continuing job losses. Downward pressure on prices runs well into the first half of 2010. But by 2010's third quarter, year-over-year percentage changes in median home prices will turn positive. The median resale single-family home prices, as measured by annual change in the California Association of Realtors benchmarks, will show prices up 1.6% in Orange County in 2010. That will follow Orange County's projected 17.9% loss for 2009 - and will mark the first local price gain in the median since 2006. Why? Sales activity shifts from lower-priced homes to pricier abodes, median will be pulled up. Ratio of median home prices to median income will reach 5.6 in 2010 - near historical average of 5.7. Ratio of Orange County to U.S. home prices will be at 2.3 - near historical average ratio of 2.4. With rapidly declining home prices over the last three years, Chapman profs think median reached a rational level, "at least, in relation to inflation rate." "We should emphasize that the factors discussed above are only relevant to median prices. High-priced homes are still subject to further price erosions."