Tag Archives: home values

Crabtree Report Bakersfield home prices set to rise 18 percent in 2013

Bakersfield home prices are on track to rise 18 percent this year — an average increase of $30,000 per house — according to a widely read monthly report released Thursday.
Local appraiser Gary Crabtree based his forecast on dual sets of data: one on the city’s monthly price changes over the 12 months ending in January, the other on price changes over the previous two years.
His report said Bakersfield median home sale prices are on track to reach $195,000 or $196,000 by the end of this year, up from January’s $164,490 median. (The median is the point at which half the homes sold for more money and half went for less.)
Between January 2012 and last month, he noted, the city’s median sales price rose 26.5 percent.
“The forecast is a function (of) median price change ONLY,” Crabtree wrote in an email. “It assumes that conditions in the past will remain the same into the future, thus it does not take into consideration other factors that may influence price such as interest rates, availability of credit, employment, job growth, inflation (including materials or labor costs) or population growth or loss.”
He added that factors underlying the market’s improvement are lack of supply, low interest rates, realistic loan underwriting and a declining inventory of distressed properties on the market.


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The 25 Hottest Neighborhoods for 2013

Great neighborhoods are the building blocks of great cities. Together, these dense collections of utterly unique histories, cultures, tastes and attitudes combine to create larger communities greater than the sum of their already considerable parts.

That is why Zillow set out to identify which neighborhoods – regardless of the city that surrounds them – will be the hottest in 2013, based on their anticipated gains in home value between December 2012 and December 2013.

Zillow analyzed forecasted Zillow Home Value Index (ZHVI) data for more than 5,100 individual neighborhoods in hundreds of cities nationwide. Below are lists of the top 10 hottest neighborhoods based on expected home value appreciation, and the 10 neighborhoods expected to show the least home value appreciation.

25 Hottest ’Hoods


Gains in home values are often driven by the same factors that contribute to dynamic neighborhoods – things such as changing local demographics, proximity to popular goods and services, attractiveness of the local housing stock and local reputation. And that remains true in a general sense.

But on this list, theres an additional factor at play: plain old supply and demand. In many of the hottest neighborhoods, there is little available supply to meet robust demand from buyers either seeking a bargain or looking to live in traditionally desirable neighborhoods. As a result, prices are expected to quickly rise as buyers engage in bidding wars on the few available properties, which in turn brings up values across the board.

As you’ll see, the hottest neighborhoods list is also dominated by neighborhoods in cities – specifically, California cities – that were among those hardest-hit by the housing recession. A large number of homeowners in these areas remain trapped by negative equity – or “underwater,” owing more on their mortgage than their home is worth – and as a result have a very difficult time listing their homes for sale. This contributes significantly to the kinds of supply constraints outlined above.


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REOCON 2013: An update on short sale and REO trends


The nation turned a corner since entering a foreclosure crisis more than four years ago, analysts attending the 2013 REOCON Summit & Expo said Monday.

Speaker Daren Blomquist, vice president of RealtyTrac, elaborated on 2012 short sale and REO trends when speaking to Realtors attending the conference in Dallas.

Blomquist assured the crowd, saying “Our data does show that we’re past the [foreclosure] peak.” He then went on to reveal some startling statistics in regards to REO activity. More than 10 million REO starts and nearly 5 million REO completions occurred between 2006 and 2012.

After the robo-signing controversy came to light in late 2010, the number of foreclosures in the U.S. began its downward trajectory in the first quarter of 2011. Meanwhile, the industry is beginning to see a stronger surge of short sales as REO properties slowly dissipate.

So what is causing this increase in pre-foreclosed properties? Many states are coming off artificial lows from last year thanks to foreclosure processing delays and banks are more frustrated by homes that are hitting the foreclosed status.

In some states, such as New York, the amount of time it takes to complete a foreclosure after it’s been taken by the bank is borderline unbelievable, according to Blomquist. The average number of days it takes in New York to complete a foreclosure is 1,089 days from the time the bank forecloses. The national average is 414 days.

“This is evidence that these markets are just taking longer to absorb the foreclosures,” Blomquist noted.

As a result of this lagging completion time, Blomquist believes there will be more distressed homeowners interested in listing their homes as short sales in the next six to 12 months in these markets.

In many markets, this may already be happening. Pre-foreclosure sales (short sales) increased 22% in Q3 of 2012, reaching the highest level since Q2 2011.

Click on the image below to see the distressed sales share documented by RealtyTrac.


Because of this ample supply of short sales, the average price of a short sale home dropped 5% in Q3 year-over-year.

California, Florida, Arizona, Michigan, Colorado and Nevada all saw more short sales than REO sales, according to RealtyTrac’s latest data.

Additionally, 31 states posted annual increases in non-foreclosure short sales in the third quarter of 2012.

While all evidence seems to be pointing towards short sales as the latest and greatest, Blomquist reminded the crowd that REOs are not dead just yet.

The fact is that, while banks are preferring short sales to REOs with all things being equal, not all properties can be sold via short sale.

“There are signs that some of these foreclosure start increases that we are seeing are starting to transfer into REOs,” Blomquist added.

In fact, in some states, REOs are beginning to bounce back already. North Carolina, Connecticut, Illinois, Mississippi and Florida are all seeing a rebound of REO sales.

“One of the things those states have in common is a very short foreclosure process,” said Blomquist.

Because of this dip in foreclosure inventory recently, the average sales price of an REO property rose 7% year-over-year in the third quarter of 2012.

“There’s still plenty of delinquencies out there that are coming down the pipeline,” added Blomquist.

According to RealtyTrac reports, assuming no additional properties come onto the market, there is currently a 20-month supply of bank-owned REOs. “Even if we didn’t have any more properties starting the foreclosure process, we’d still have 1.5 million properties in the waiting pool,” said Blomquist.

“It’s good to be aware of what you’re dealing with in your market,” Blomquist concluded.


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Local median home prices strong in August

The median price for an existing single-family home in the Bakersfield area was $175,000 in August, excluding distressed transactions that artificially lower sale prices. That’s up 6 percent since July and up 9.4 percent year-over-year, according to the Preliminary Crabtree Report, a monthly guage of the region’s real estate market produced by Affiliated Appraisers.

The cumulative median sale price for market rate sales and distressed sales combined was $155,000, up 9.1 percent for the month and 15.7 percent for the year.

A distressed sale is a short sale or a so-called real estate-owned property, commonly referred to as an REO. A short sale is an agreement between a lender and a seller to put a home on the market for less than the balance on the mortgage. An REO is a property owned by a lender who is selling after foreclosing on the previous owner.

Crabtree said the market has been held back by appraisals coming in low because some appraisers use distressed sales as comps to determine a home’s appropriate sale price.

That inhibits buyers who are borrowers because banks won’t lend for more than a home’s appraised value.

“It’s frustrating, yes, that is our challenge,” said Young Trieu, an agent with Re/Max Golden Empire in Bakersfield who routinely sees appraisals for as much as 20 percent less than winning bids. “A lot of times the appraisal is lower than the accepted offer because you have to be aggressive to win.”

Based on price per square foot, Crabtree estimated there was a discount of 24.2 percent in August between prices for distressed properties and those going for market rate.

The biggest discounts were at the upper and lower ends of the market.

“At the lower end it’s because what properties are left are basically trashed, and at the upper end it’s because we don’t have enough buyers who can afford the nicer homes,” Crabtree said. “We have homes in Grand Island where sales should be in the mid- to high-400s, and they’re selling in the high threes to low fours.”

It’s hard to say how much longer that will go on, but it can’t continue indefinitely.

REOs are declining in the Bakersfield area as the region works through its massive inventory of foreclosures. They accounted for 17.9 percent of total sales in August, down by more than half from a year ago and the lowest since the housing bubble burst.

With or without distressed sales, things are looking up. Some of it is timing, Crabtree said.

The waiting period to buy a house after a foreclosure generally is five to seven years, but some lenders will finance again after just three years if the default was caused by circumstances beyond a borrower’s control, such as a death in the family or job layoff.

“For some people who went through foreclosure early on, it’s been three years and they are able to get back in the market again,” Crabtree said.

Unfortunately, those buyers are finding a tough market. There were only 626 active listings in the Bakersfield area in August, excluding homes with contingent offers. That’s led to bidding wars that are hard to win when families with loans are competing with investors paying cash.

“It’s a struggle, but we have been finding homes,” said Terri Collins, a broker associate with Watson Realty in Bakersfield. “It just takes some patience. You just have to buckle down and keep at it.”

The good news is supply is creeping up again. It rose 4.6 percent from July to August. That’s in spite of a 40.5 percent fall in foreclosures since last year.

Closed sales, a measure of demand, rose 12.5 percent for the month to 568, but dropped 19.5 percent for the year.


BY COURTENAY EDELHART Californian staff writer cedelhart@bakersfield.com

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