UC Berkeley Real Estate Symposium Presentation: Of Silver Linings & Dark Clouds
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RealtyTrac Vice President Daren Blomquist presents about the nascent residential real estate recovery at the 35th annual Real Estate & Economics Symposium sponsored by the Fisher Center for Real Estate and Urban Economics at the University of California at Berkeley.
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UC Berkeley Real Estate Symposium Presentation: Of Silver Linings & Dark Clouds
- 1. OF SILVER LININGS & DARK CLOUDS
- 2. SILVER LINING 1: FALLING FORECLOSURES ©RealtyTrac Inc. 2012, Not for Distribution 2
- 3. U.S. FORECLOSURES AT 5-YEAR LOWS
- 4. CALIFORNIA FORECLOSURES DOWN October 2012 lowest October 2012 lowest monthly level since monthly level since April 2007 April 2007 ©RealtyTrac Inc. 2012, Not for Distribution 4
- 5. DARK CLOUD: LATENT DISTRESS 1.5 million U.S. properties in some stage of foreclosure REO inventory REO inventory represents 15- represents 15- month supply at month supply at current REO sales current REO sales pace pace 5
- 6. DARK CLOUD: LATENT DISTRESS 3.2 million U.S. delinquent mortgages 6
- 7. EVEN MORE POTENTIAL DISTRESS 12.5 million mortgages seriously underwater ©RealtyTrac Inc. 2012, Not for Distribution 7
- 8. MARKET READY FOR MORE “I need more homes to show my buyers. . . “I need more homes to show my buyers. As much as I Ihate to see people lose their As much as hate to see people lose their homes in foreclosure, we need more homes in foreclosure, we need more inventory from some place.” inventory from some place.” -Ben Richardson, Realtor, Roseville, CA -Ben Richardson, Realtor, Roseville, CA ©RealtyTrac Inc. 2012, Not for Distribution 8
- 9. SILVER LINING 2: FORECLOSURE SALES DOWN ©RealtyTrac Inc. 2012, Not for Distribution 9
- 10. ABRUPT CHANGE OF COURSE California foreclosure California foreclosure sales declined 10 percent sales declined 10 percent after four straight after four straight quarters of increases quarters of increases ©RealtyTrac Inc. 2012, Not for Distribution 10
- 11. DARK CLOUD: UPSTREAM DISPOSAL While foreclosure While foreclosure sales are down from sales are down from aayear ago, no- year ago, no- default short sales default short sales increased 39 percent increased 39 percent annually annually ©RealtyTrac Inc. 2012, Not for Distribution 11
- 12. SILVER LINING 3: RISING PRICES ©RealtyTrac Inc. 2012, Not for Distribution 12
- 13. PRICES RISING NATIONWIDE California foreclosure California foreclosure prices increased 44 prices increased percent YOY, biggest percent YOY, biggest increase since Q2 2010 increase since Q2 2010 First annual increase in First annual increase in average foreclosure average foreclosure price since Q2 2010 and price since Q2 2010 and biggest increase since biggest increase since Q4 2006 Q4 2006
- 14. PRICES RISING IN MOST CA METROS ©RealtyTrac Inc. 2012, Not for Distribution 14
- 15. DARK CLOUD: DELAYED SUPPLY ©RealtyTrac Inc. 2012, Not for Distribution 15
- 16. DARK CLOUD: DEFERRED DISTRESS California foreclosure California foreclosure activity down 29 activity down 29 percent percent ©RealtyTrac Inc. 2012, Not for Distribution 16
- 17. DARK CLOUD: DELAYED SUPPLY ©RealtyTrac Inc. 2012, Not for Distribution 17
- 18. FLIPPING: SCATTERED SHOWERS •• Los Angeles up 61% Los Angeles up 61% •• Riverside up 38% Riverside up 38% •• Sacramento up 25% Sacramento up 25% •• San Francisco up 57% San Francisco up 57% •• San Diego up 20% San Diego up 20% ©RealtyTrac Inc. 2012, Not for Distribution 18
- 19. RESOURCES FOR RESEARCH • RealtyTrac Trend Center (Free) www.realtytrac.com/trendcenter • Data Licensing: licensing@realtytrac.com • Foreclosure News Report www.foreclosurenewsreport.com • Daren Blomquist, RealtyTrac Vice President – darenb@realtytrac.com ©RealtyTrac Inc. 2012, Not for Distribution 19
Editor's Notes
- September 2012 foreclosure activity was 47 percent below the peak year of 2009 and 18 percent below 2007 levels, the first year we started to see elevated levels of foreclosure activity nationwide.
- Foreclosure Inventory down 32 percent from peak of 2.2 million in December 2010, but still stubbornly high. We estimate only 15 percent of REO properties nationwide are listed for sale, frustrating real estate agents with ready, willing and able buyers. In California, we’re estimating only 11 percent of the unsold REO inventory is listed for sale. Although in California, REO inventory is down to about 70,000 as of the end of October, down 50 percent from the approximately 140,000 in October 2010, when the robo-signing controversy came to light.
- In places like Merced, Sacramento and Stockton, the underwater percentage is 40 to 50 percent of all mortgages, but in San Francisco County it’s only 10 percent.
- The second quarter annual decrease in foreclosure-related sales was the first annual decrease after five consecutive quarters of increases.
- On track for more than 1.1 million short sales, both those in foreclosure and those prior to foreclosure start, in 2012. That compares to about 625,000 completed foreclosures for the year. Also consider sales of non-performing loans at a discount, which could delay another round of eventual foreclosures.
- Flippers are eating up the distressed inventory at low prices, fixing it up to better condition and either flipping to another investor who then rents the home or to an owner-occupant who lives there. Flippers are filling an important need in the distressed property-heavy housing market, but there is risk that the flipping frenzy may be creating some mini price bubbles in some markets.