by Calculated Risk on 10/11/2011 11:40:00 PM

I bring you what I'm hearing - and this is an optimistic outlook from Jim the Realtor in San Diego:

"The [real estate] market is a buzz currently. The action is incredible. Offers flying everywhere. I think the buyers are scrambling knowing that these rates are incredible right now. And I think it is going to be a healthy 4th quarter.
...
I think we get into spring time - if rates are still this low - it’s going to be a real frenzy."
Jim Klinge, Oct 2011

by Calculated Risk on 10/11/2011 06:50:00 PM

I've been following the Sacramento market to see the change in mix over time (conventional, REOs, and short sales) in a distressed area. The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

As I've written before: "I'm not sure what I'm looking for, but I'll know it when I see it!" (hopefully) At some point, the number (and percent) of distressed sales should start to decline without market distortions.

The percent of distressed sales in Sacramento increased in September compared to August. In September 2011, 64.0% of all resales (single family homes and condos) were distressed sales. This is up from 62.0% in August, and down slightly from 64.1% in September 2010.

Here are the statistics.

Click on graph for larger image in graph gallery.

This graph shows the percent of REO, short sales and conventional sales. There is a seasonal pattern for conventional sales (strong in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales decreases every summer and the increases in the fall and winter.

Total sales were up 12.9% over September 2010. Sales were up slightly compared to September 2009.

Active Listing Inventory is down 30% from last September, although "short sale contingent" has increased. Still, we are seeing a sharp decline in inventory in many areas, and that is something to watch. Once the foreclosure delays end, this data might be helpful in determining when the market is improving.

So far - no improvement!

by Calculated Risk on 10/11/2011 03:32:00 PM

This is a report for several western states ... from ForeclosureRadar: After Big Jump in August, Foreclosure Starts Fall Again

After a significant jump in foreclosure starts in August, driven primarily by Bank of America, foreclosure starts returned to levels in line with prior months, far below the numbers reached at the peak. California has seen a drop in activity of 56 percent since its peak, from 58,623 Notice of Default filings in March of 2009 to 25,778 today. Arizona shows a similar swing in Notice of Trustee Sale filings, from 14,722 in March of 2009 to 5,982 filings last month - a decrease of 59.4 percent. Washington shows the greatest decrease of all, with 71.5 percent less Notice of Trustee Sale filings today than at their peak in June of 2009.

Foreclosure sales were mixed this month, with declines in Arizona, California and Nevada, while Oregon and Washington both showed increases. Despite the declines, the percentage purchased by third parties, typically investors, was at or near peak levels. In California, third parties made up a record 27.4 percent of all sales last month. In Arizona, that number was even higher at 38.3 percent, also a record. Nevada was just shy of their record, set in August at 29.1 percent. Sales to third parties was up Washington was up 15.6 percent, a record for this year. Oregon was the only state to to show a decrease, down from 15.5 percent in July to 6.0 percent today.

Investors are very active in most of these states with third party buying at or near record levels.

by Calculated Risk on 10/11/2011 01:38:00 PM

I've been tracking the MBA mortgage purchase application index every week, and that index suggests a fairly sharp decline in mortgage purchase applications in August. That decline would normally suggest weaker home sales in September (seasonally adjusted), however that index doesn't include investors who usually pay cash ... and investors are very active in many markets.

Here is an example from the Las Vegas Sun: Realtors:

Las Vegas home prices off 8.6 percent from September 2010Las Vegas-area home ... sales stayed strong thanks to investors snapping up homes [the Greater Las Vegas Association of Realtors] ... said the total number of existing local homes, condominiums and townhomes sold in September was 4,108. That was down from 4,693 sales in August – the second-best month ever for existing home sales in Southern Nevada.

But September’s sales total was up from 3,603 sales one year ago.

And from economist Tom Lawler on Las Vegas:

About 45% of last month’s sales were bank-owned properties, down from 50% in August, while short sales comprised 25% of September sales, up from 21% in August. Active listings in September totaled 25,995, down 4.6% from August and down 9.3% from a year ago

So even though the MBA index declined recently, existing home sales might still be fairly strong in September due to investor buying.

by Calculated Risk on 10/11/2011 10:10:00 AM

Statement by the European Commission, the ECB and IMF on the Fifth Review Mission to Greece

Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) have concluded their fifth review mission to Greece to discuss recent economic developments. The mission has reached staff-level agreement with the authorities on the economic and financial policies needed to bring the government’s economic program back on track.
...
Once the Eurogroup and the IMF’s Executive Board have approved the conclusions of the fifth review, the next tranche of EUR 8 billion (EUR 5.8 billion by the euro area Member States, and EUR 2.2 billion by the IMF) will become available, most likely, in early November.

From the NY Times: Slovak Leader Vows to Resign If Bailout Vote Fails

Lawmakers in Slovakia were scrambling on Tuesday to avert political and financial disaster over the vote on the expansion of the euro rescue fund, after the prime minister tied the fate of her government to the legislation through a confidence vote.
...
The opposition Smer-Social Democracy party could bridge the gap, but its leader, the former prime minister Robert Fico, said he would support the proposal only in exchange for new elections, which could return him to power. He told reporters in Bratislava that his party would abstain from the vote but could support the measure at a later session if it failed.

It sounds like the EFSF vote might fail in Slovakia before passing later this week. Slovakia is the last country to vote on the enhanced EFSF.

The next step for Greece is the size of the haircuts, and various reports suggest the haircuts will be close to 50%.