Sweet Orange

On February 11th, the Orange County Home Ownership Preservation Collaborative (OC HOPC) is offering a free workshop for anyone who needs help with preventing a foreclosure on their home. This is part of the on-going free foreclosure prevention workshops that OC HOPC is providing in partnership with various organizations. The February 11th workshop is in partnership with the U.S Department of Housing and Urban Development (HUD), City of Santa Ana, National Association of Realtors, California Association of Realtors, Orange County Association of Realtors, and Calvary Church.

HUD-approved housing counselors, legal counselors and lenders will be on-site to help at the workshop. However, only homeowners whose names are on the mortgage can be assisted, so OC HOPC asks that you do not send someone in your place. If you need assistance but can’t make this workshop, you might contact OC HOPE and ask what other help is available or when and where the next workshop will be held.

Here are the details for the upcoming OC HOPC workshop:

When: Thursday, February 11, 2010
Session 1–2:30 to 4:30 pm (English, registration begins at 2:00 pm)
Session 2–5:30 to 7:30 pm (Spanish, registration begins at 5:00 pm)

Where: Calvary Church, 1010 N. Tustin Avenue, Santa Ana

Who: Open to public
RSVP Recommended (www.oc.myhousingforall.org or e-mail myhousingforall@aol.com)

What to Bring:

• Your loan documents and recent mortgage statement
• Your two most current pay stubs
• Your most recent W2s–two-years worth
• Your most recent tax returns–two-years worth
• A list of your monthly expenses

Cost: Free

Again, if you need help with preventing a foreclosure but can’t attend this workshop, contact OC HOPC to see what other help is available.

Here are the most recent Orange County foreclosure numbers from DQNews:

Notice of Defaults (NODs)–This is the first step in the foreclosure process; however, this does not necessarily end in the home being taken back by the lender.

Fourth Quarter 2009 Year-Over-Year Numbers:

• 2009–5,555
• 2008–4,481
• This is a 24.0% year-over-year increase. However, the quarter-to-quarter number of NODs deceased.

Third Quarter 2009 Year-Over-Year Numbers:

• 2009–7,436
• 2008—5,692
• This is a 30.6% year-over-year increase.

Trustee Sales Recorded–This is the last step in the foreclosure process. The home is sold to a new owner at a trustee auction or taken back by the lender in this stage of the foreclosure process.

Fourth Quarter 2009 Year-Over-Year Numbers:

• 2009–2,235
• 2008–2,088
• This is a 7.0% year-over-year increase. In addition, the quarter-to-quarter number of trustee sales is approximately the same.

Third Quarter 2009 Year-Over-Year Numbers:

• 2009–2,238
• 2008—3,997
• This is a 44.0% year-over-year decrease.

Recently, I wrote about some new laws that went into effect on January 1 and apply to the real estate industry. A new law that applies to the building and remodeling industries also went into effect.

Before January 1, all pipes, pipe fittings, plumbing fixtures and other fixtures that might become wet were allowed up to a total contain of 8% lead. On January 1, 2010, the allowed amount was reduced to 0.25%.

I am sure that there are differencing opinions on what amount of lead would be harmful. But, no matter what that level is, exceeding that amount can result in the following:

Lead can increase blood pressure and cause fertility problems, nerve disorders, muscle and joint pain, irritability, and memory or concentration problems. It takes a significantly greater level of exposure to lead for adults than it does for kids to sustain adverse health effects.–”Lead and Your Health,” National Institute of Environmental Health Science  (NIEHS)

As the NIEHS quote states, lead poisoning can be particularly harmful to children. The KidsHealth website provides more information on this:

Lead poisoning can lead to a variety of health problems in kids, including:

• decreased bone and muscle growth
• poor muscle coordination
• damage to the nervous system, kidneys, and/or hearing
• speech and language problems
• developmental delay
• seizures and unconsciousness (in cases of extremely high lead levels)
  –”Lead Poisoning,” KidsHealth

Notice of Defaults up, and trustee sales down. That is what the most recent numbers from DQNews are telling us about the foreclosure process in Orange County.

Here are the numbers from DQNews:

Notice of Defaults (This is the first step in the foreclosure process; however, this does not necessarily end in the home being taken back by the lender.)

• 2008Q3—5,692
• 2009Q3–7,436
• This is a 30.60% increase.

Trustee Sales Recorded (This is the last step in the foreclosure process. The home is taken back by the lender in this stage of foreclosure.)

• 2008Q3–3,997
• 2009Q3–2,238
• This is a 44.00% decrease.

Here is what John Walsh, DataQuick president, makes of these numbers:

It may well be that lenders have intentionally slowed down the pace of formal foreclosure proceedings. If so, it’s not out of the goodness of their hearts. It’s because they’ve concluded that flooding the market with cheap foreclosures in this economic environment may not be in their best financial interest. Trying to keep motivated, employed homeowners in their homes might be the most cost-efficient way to stem losses.

He goes on to say:

There’s a batch of truly nasty loans that were made in mid 2006. There’s another batch made in late 2006. These are worse than the mortgages before and after, and it’s taking a long time to process them.

The 2009 fourth quarter number from DataQuick should be out soon. We will see if the Q3 and Q4 numbers tell the same story. I expect that they will.

Update: New numbers from DataQuick have just been released. sw 1-30-10

It’s a new year which means that many new laws went into effect on January 1st.

Here are some of the new regulations that now apply to California real estate:

• Loan officers must register with the state.
• Making inaccurate information during the mortgage application process in now a crime.
• Banks must inform potential borrowers of all their loan products.
• Lenders are not allowed to steer borrowers who qualify for a fixed-rate loan into riskier, higher-priced loans.
• Negative amortization loans are banned in most cases.
• Penalties that are assessed to a borrower when they pay off a loan early are now capped.
• Lenders must give potential customers of a reverse mortgage the following: a list of counseling agencies that deal with reverse mortgages and a list that checks off the potential risks associated with reverse mortgages as well as alternatives to reverse mortgages. Reverse mortgages converts a borrowers home equity into cash. They are geared to senior citizens. For additional information on reverse mortgages, see the AARP website.

For related information, see Realty World, Arnold CA Blog.

Source: “News laws shield buyers,” The Associated Press as printed in The Orange County Register on January 1, 2010

Following is a quote from a Next Ten analysis conducted by Collaborative Economics, using data from New Energy Finance, Clean Tech GroupTM, LLC, and The National Establishments Time-Series (NETS) database based on Dun & Bradstreet business-unit data:

Between 1995-2008, green businesses increased 45%, green jobs grew 36% while total jobs in the state grew only 13%….In Orange County green transportation jobs grew 1,875% including alternative fuels and motor vehicles and equipment. Energy generation jobs grew by 176%.

Maybe one of your New Year resolutions is to put yourself in a better position to find a job or have a better sense of job security. If so, you should be aware that, as the above quote shows, Orange County is a green jobs hub. That’s right, the Big Orange is going green. So no matter what you think of green living or sustainable technology, its the job-rich industry of the near future. And if you live in Orange County, you live in a green-jobs hub.

According to the City of Los Angeles Workforce Investment Board, some of the up and coming green technology jobs are

electricians, plumbers and pipe-fitters, carpenters, construction laborers and general and operations managers. Further, the largest “middle-skill” occupations in Los Angeles’ green technology industries requiring an average of 1.5 years or less of training and education, include: electricians; architectural drafters; plumbers and pipefitters; sheet metal workers; carpenters; bookkeepers and auditors; secretaries; general helpers-electricians; construction laborers; office clerks-general; and refuse and recyclable collectors.

In addition:

…large-scale solar panel installation projects by major public utilities, suggests that demand for Photovoltaic Installers will soon accelerate.

If you want training in green tech, check your local colleges such as Orange Coast or Santiago Community College to see what they have available. The Orange County Workforce Investment Board (OCWIB) is another source that might help you with job training information.

53 Carver, Irvine

Northwood in a popular area in Irvine. So I am somewhat surprised that the 2,770-SF, 7-bedroom home at 53 Carver in still on the market after over 5 months. Part of my surprise is that the asking price is $649,000 or $234 per square foot–reasonable for this area. For example, the nearby but smaller home at 26 Carver sold in July for $655,000 or $298 per square foot. Another selling point for this home is that it has no HOA fee or Mello Roos tax. (This is true for many of the homes in Northwood.)

26 Carver, Irvine

The problem might be that this is a short sale. In the beginning of August, the asking price was $699,000, but by the end of August, the price was dropped to $599,900. However, in September the asking price was increased to $690,000 but reduced in October to $649,000. Maybe the bank has been reluctant to accept a reduced price for this home.

Note: This home last sold in 2004 for $800,000. Also, according to Redfin, the December median price per square that a detached home in Northwood sold for was $329 per square foot.

Here is what some other homes on Carver have sold for:

26 Carver

• 4 bedrooms/2 baths with 2,200 square feet
• Sold on July 30, 2009 for $655,000 ($298/SF)

16 Carver

• 5 bedrooms/3 baths with 2,754 square feet
• Sold on February 19, 2009 for $750,000 ($272/SF)

6 Carver

• 4 bedrooms/3 baths with 2,800 square feet
• Sold on April 22, 2009 for $775,000 ($277/SF)

1082 Visalia Drive

The next two post will allow us to do a little compare and contrast between similar Irvine and Costa Mesa detached homes. First, a single-family home at 1082 Visalia in Costa Mesa’s South Coast Metro area.

This four-bedroom and three-bath home with 2,392 square feet is in walking distance to South Coast Plaza. It also has bonus room with an office area and workout room. Outside on the 6,555 square foot lot is a tool shed, pool, spa, and pool house. No HOA fee or Mellos tax is listed. The asking price was reduced earlier this month to $699,000 or $292 per square foot. The previous asking price was $719,900 or $301 per square foot.

To see how realistic this asking price is, let’s compare to some nearby single-family homes that sold recently and  also have 4 bedrooms/3 baths:

• 3488 Queens Court sold on July 14, 2009  for $695,000 ($268/SF)
  This home is 0.39 miles away from the Visalia home and has 2,594 square feet. The HOA fee is $130. No Mellos Roos tax is listed.
• 1106 San Jose sold on July 27, 2009for $601,000 ($266/SF)
  This home is 0.32  miles away from the Visalia home and has 2,262 square feet. The HOA fee is $130. No Mellos Roos tax is listed.
• 1074 Redding Avenue sold on September 4, 2009 for $630,000  ($263/SF). This home is 0.06  miles away from the Visalia home and has 2,391 square feet. No HOA fee or Mellos Roos tax is listed. This home is real estate owned.

Since this asking price for this home is $292 per square foot and the nearby similar homes sold for $263, $266 snf $268 per square foot, the asking price might be unrealistic. We’ll see.

Note: According to Redfin, the December median price per square that a detached home in Costa Mesa sold for was $329 per square foot.

Up next: single-family homes in Irvine’s Northwood

In my last post, I listed some predictions on Irvine’s 2010 housing market from Larry Roberts of the Irvine Housing Blog.

Here is a different perspective. According to Mark Boud of Real Estate Economics:

“The new-home market may rebound more dramatically than the overall housing market. For example, new homes being offered on the Irvine Ranch may absorb and appreciate faster than anyone anticipates - partly due to the lack of competitive new-home inventory and partly due to a faster-than-anticipated drop in distressed housing inventory. As early as January, there may be a bit of a new home ‘frenzy’ on the Irvine Ranch.”

“…a faster-than-anticipated drop in distressed housing inventory.”? Is it that likely that the inventory of distressed homes will decrease drastically in 2010? Or will shadow inventory make itself felt in a more substantial way in 2010 than it did in 2009? We’ll see.

For more 2010 housing predictions, see “What might shock the housing market in 2010?”

As everyone knows by now, we are on the bursting side of a housing bubble. During the bubble, housing prices soared to a level that was not in line with most incomes. Now that the bubble has burst, we are in a deflating period that will bring housing prices down to a level that is a reasonable income-to-housing-price ratio.

Like other Orange County cities, Irvine has been affected by this drop in home prices. However, prices in Irvine have experienced more immunity to the price deceases than other cities–especially in the mid-priced range. Will this immunity continue in 2010?

Larry Roberts (aka IrvineRenter) of the Irvine Housing Blog makes some interesting predictions for the 2010 Irvine housing market. Here they are:

Inventory will increase in 2010.

Eventually, lenders are going to have to foreclose on properties, kick out the squatters, and resell the houses in the resale market. Inventory is coming; how much of that we will see in 2010 is anyone’s guess, but I believe we will see much more than we saw in 2009.

Affordability will improve as mid to high end properties are released to the market, and prices of the houses of greatest interest to buyers in Irvine should come down because, despite the buyer interest, there are more properties in distress than there are buyers interested in obtaining them.

Prices in Irvine will fall 2%-5% in 2010.

Increasing interest rates will decrease affordability, and increasing supply will force sales onto the market. The combination will cause prices to begin a multi-year slow decline similar to the 1994-1997 period. The price decline will not be orderly, and the relative stability in the median will mask seismic shifts within the market at sales composition changes (more mid to high end properties will sell) and prices of individual properties decline.

Properties selling at or below rental parity become the norm in 2010.

As I have noted on other occasions, many properties, even in Irvine, are trading at or below rental parity. This will happen more often, and it will happen at higher and higher price points.

What do you think? Will Irvine home prices continue to hold up relatively well? Or is Irvine housing about to play a bigger role in the Big Unwind in Housing Prices?

See Roberts’ IHB post for more 2010 housing predictions. You will also see how his predictions for 2009 panned out.