This week's real estate headlines show that pending sales in Orange County are up, and a housing recovery is on the way, with the housing crisis expected to end this year. If you are interested in receiving a weekly round-up of Orange County real estate news, sign up for our RSS feed to receive instant updates regarding real estate in all Orange County cities including Newport Beach, Newport Coast, Corona del Mar and Laguna Beach.
“TRENDS”
Reports on housing.com found that as of January 19, the number of new Orange County pending sales was up 15 percent compared with the same period a year ago.
-Jonathan Lansner, ORANGE COUNTY REGISTER BUSINESS SECTION 1/29/2012
“FORECLOSURES ARE A HOT TICKET”
Maybe that foreclosure “shadow supply” issue is not as bad as we think, because demand for foreclosed properties is strong.
Still being gobbled up – they represent 20 percent of total transactions in the third quarter of 2011. In California, the share of foreclosure related sales was 44% in the third quarter of 2011.
-G. U. Krueger, ORANGE COUNTY REGISTER BUSINESS SECTION 1/29/2012
“HOUSING CRISIS TO END?”
Capital Economics expects the housing crisis to end this year – one of the reasons is the loosening of credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability. Banks are now lending amounts up to 3.5 times borrower earnings.
This is up from a low during the crisis of 3.2 times borrower earnings. Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes, “the clearest sign yet of an improvement in mortgage credit conditions.” In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
-Krista Franks, DSNEWS.COM 1/24/2012
“HOUSING RECOVERY”
Long-awaited housing recovery is beginning to blossom, according to industry experts taking a look at recent existing-home sales.
While admitting home sales, “are still very low,” Paul Dales, chief economist at Capital Economics, says, “it is clear that housing recovery is now well underway.”
The evidence: home sales have been on the rise for the past three months, posting a 5 percent increase in December. Lawrence Yun, chief economist for the National Association of REALTORS® (NAR), concurs with Dales’ assessment, saying, “the pattern of home sales in recent months demonstrates a market in recovery.”
Investor demand remains steady with 21 percent of homes sold in December going to investors after this category of buyers took 19 percent of purchases in November and 20 percent one year ago.
Cash sales – commonly linked to investors – made up 31 percent of December’s existing-home sales. This rate was 28 percent in November and 29 percent a year ago.
“The inventory supply suggests many markets will continue to see prices stabilize or grow moderately in the near future,” Yun said.
-Krista Franks, DSNEWS.COM 1/20/2012