California Housing Market Leads the Way to Recovery in the Wake of Subprime Mortgage Loan Crisi

In the days leading up to the great recession, California led the country in subprime mortgage loans — reckless transactions that played a major role in the housing market bust, both here and throughout the rest of the country. However, a new RealtyTrac data report published in the San Francisco Chronicle shows the California housing market now leading the way to real estate recovery through a combination of reduced defaults, increased demand in move-up markets and lively activity on the part of investors.

After being buried in the aftermath of countless foreclosures following the implosion of the housing bubble, California has finally succeeded in stabilizing the housing market. The latest RealtyTrac data shows U.S. foreclosure filings at their lowest in nearly five years – thanks in large part to a dramatic reduction in defaults throughout California. Initial statewide default filings fell to their lowest point in 69 months, signifying a decrease of 45% compared to this time last year. Meanwhile, home sales in the state’s most populous regions jumped to highest rates since 2006 as of August 2012. Across the nation, housing market trends are mirroring California’s advances” defaults fell by 34% in Arizona, 22% in Michigan and 21% in Georgia, while overall U.S. home values rose by 1.2% relative to last year’s figures.

In addition to reduced defaults, California has also enjoyed a brisk uptake in market activity from investors and move-up buyers, with the bulk of real estate purchase power centered in the coastal markets and moving steadily inland into the autumn months.

From reckless lending to smart investing: the future of California real estate
With California moving swiftly ahead in the direction of real estate recovery, now is the time for move-up buyers to capitalize on comparatively low home prices and historically low interest rates while they still can. Here in Santa Cruz, the time is ripe for qualified buyers in desirable coastal markets.

To learn more contact Authentic Real Estate and find out about the current trend in South Bay Area real estate: http://www.authenticre.com or (831) 426 0294

California Homes Prices Predicted to Rise in 2013

California home sales and prices will likely rise this year and in 2013, though low inventory and restricted lending will continue to curb housing market growth, according to a forecast from the California Association of Realtors.

Sales of existing, single-family homes are up 6.5 percent through August compared to the same period last year. After a slight 1.1 percent increase in 2011, CAR expects sales to jump for the second year in a row this year to 530,300 homes, up 5.1 percent from 2011. CAR anticipates a further 1.3 percent increase in 2013, to 530,000 homes.

"The market has improved moderately over the past year, and we expect that to continue into 2013," said CAR President LeFrancis Arnold in a statement.

Arnold said sales would be even higher if inventory were less constrained in markets dominated by sales of bank-owned properties, particularly in the Central Valley and Inland Empire, "where there is an extreme shortage of available homes. Sales will be stronger in higher-priced areas, where there are more equity properties and a somewhat greater availability of homes for sale."

 Leslie Appleton-Young, CAR's vice president and chief economist, said in a conference call that low inventory and "defensive lending" by lenders were "the speed bumps in the California housing highway."
Lenders "are not lending to hold the mortgage. They're lending to sell the mortgage on the secondary mortgage market and they want to avoid having to buy that back," she said.

California Foreclosure Inventory Continues to Fall

In another positive sign for the housing market, the nation's so-called shadow inventory of properties in the foreclosure pipeline fell by more than 10 percent in July from the same period a year before, CoreLogic reported Tuesday. The tracking firm in Irvine, Calif., said the number of housing units in jeopardy of foreclosure -- or that lenders have repossessed but not yet listed for sale -- dropped to 2.3 million this July from 2.6 million a year earlier.

"This is yet another hopeful sign that the housing market is slowly healing," said Anand Nallathambi, president and CEO of CoreLogic. The report should be welcome news for homeowners worried that a wave of foreclosure sales might further depress housing values.

The real estate market generally has been on the path toward recovery this year, with home prices pressed upward by the low inventory of homes for sale and by record-low 30-year mortgage rates, now below 4 percent. Experts have pointed to the shadow inventory as a potential threat to the fledgling upturn. Large numbers of foreclosed homes hitting the market could drive prices down.

The improving economy and alternatives to foreclosure, including short sales and loan modifications, have helped prevent homes from becoming part of the shadow inventory. CoreLogic s calculates the shadow inventory by adding the number of homes in foreclosure and those that are bank-owned but not yet for sale. Homes where owners are 90 days or more past due on their payments also are included.


All told, the shadow inventory in the United States was worth about $382 billion as of July, the firm estimated. That's down from $397 billion a year ago, it said. Forty-five percent of all distressed properties are in five states: California, Florida, Illinois, New York and New Jersey, CoreLogic reported