The U.S. National Home Price Index declined 3.9 percent during the fourth quarter, according to the S&P/Case-Shiller Home Price Indices.  The National Index declined 4.1 percent compared with the fourth quarter of 2009, the lowest annual growth rate since the third quarter of 2009.  As of December 2010, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down compared with December 2009.  Both Los Angeles and San Francisco reported negative annual rates of return in December, leaving San Diego and Washington DC as the only two cities where home prices are increasing on a year-over-year basis, at 1.7 percent and 4.1 percent, respectively.

In December, the 10- and 20-City Composites posted annual rates of decline of 1.2 percent and 2.4 percent, respectively. Thirteen of the 20 MSAs and both monthly Composites saw their annual growth rates fall in December versus November.

As of the fourth quarter of 2010, average home prices across the United States are at similar levels to what they were in the first quarter of 2003.

The 10-City and 20-City Composites were down 0.9% and 1.0%, respectively, from their November levels. They are now only 3.9% and 2.3% above their April 2009 troughs, respectively. In July 2010, they were +7.9% and +6.9% above the troughs, respectively.

Reprinted from C.A.R. Newlines. 

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

According to RealtyTrac.com’s 2010 Year-End Foreclosure Sales Report, nearly 26 percent of all homes sold during the year were foreclosures, up three percent from 2008 and down three percent from 2009. The average sales price of foreclosures in 2010 was 28% less than non-foreclosure home. California, Nevada and Arizona lead with the highest percentage of foreclosure sales nationally.

Anyone who has purchased a home, bought a car or taken out a time repayment loan has come across these three letters, A. P. R. (Annual Percentage Rate), and probably  have come away scratching their head trying to make sense of what it actually means.

Wikipedia defines it as so:

The nominal APR is calculated as: the rate, for a payment period, multiplied by the number of payment periods in a year.^[1] However, the exact legal definition of “effective APR”, or EAR in short, can vary greatly in each jurisdiction, depending on the type of fees included, such as participation fees, loan origination fees, monthly service charges, or late fees. The effective APR has been called the “mathematically-true” interest rate for each year.^[3][4] The computation for the effective APR, as the fee+compound interest rate, can also vary depending on whether the up-front fees, such as origination or participation fees, are added to the entire amount, or treated as a short-term loan due in the first payment. When start-up fees are paid as first payment(s), the balance due might accrue more interest, as being delayed by the extra payment period(s).^[5]

If you make sense of this, you are doing better than I. The best article I found is one from the New York Times. Though still a bit of a challenge, if you read it slowly it will make sense. 

The New York Times

The lending industry has tried to make it easier for borrowers to understand the true cost of a mortgage by disclosing both its interest rate and its annual percentage rate, or A.P.R.  But consumers may often wonder which figure they should focus on when buying or refinancing a property.

Read the full story

Reprinted from C.A.R. Market Matters. 

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

Home sellers continued to lower their asking prices in January, hoping to entice buyers to move towards a purchase, according to a report by ZipRealty.  ZipRealty’s monthly Price Reduction report, which is generated from a review of MLS-listed properties in 26 markets, shows that inventory rose 2.81 percent compared with a year ago, but the total number of homes where sellers have reduced the asking price at least once rose 17.6 percent.

In month-to-month comparisons, there were fewer discounted homes for sale in January than December, with the number of price-reduced homes on the market declining 4.1 percent and total inventory down 2.1 percent. Although price-reduced inventory outstripped last year’s levels, the percentage slipped from 47.2 percent to 46.2 percent, making it the second straight monthly decline.

Markets with the largest median price reduction in absolute dollars were: San Francisco, $32,500; Orange County, Calif., $31,000; San Diego, $29,100; Miami/Ft. Lauderdale/Palm Beach, $25,000; and Seattle, $25,000.

Reprinted from C.A.R. Newlines. 

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

Remember from my July 18, 2009 post “Napa Valley Real Estate, a Tale of Two Times Two Markets“ was the number of distressed sales (in foreclosure, a short sale or a bank owned property, REO) increasing for homes priced $800,000 to $2,000,000, especially up valley. By up valley I mean the Cities of St. Helena, Calistoga, Angwin, Deer Park, Oakville, Rutherford and the Town of Yountville and only those listed in BAREIS, my MLS. Today, there are 8 distressed sales of 57 active listings in this price range, compared to 10 of 57 on February 1 st.

This still represents a drop in the number of homes for sale in this price range, down from 90-100 which has been typical in the last two years I have been tracking this.  One other thing to remember, the last time I compared BAREIS stats to Realist, a company who’s data comes from the county tax assessor, the 8 in BAREIS was only approximately one third of the total in Realist. Heck, there are 3 in foreclosure in my own subdivision, the Vintage, in Yountville which are not in BAREIS. Time will tell and it will be very interesting to see if this trend changes in the spring when traditionally many properties come to market. Keep tuning in for this as a new monthly stat I will regularly tract from now own. Next look April 1st.

Stats for last 7 days

new listing 0, price reduced 0, sale pending 1,  sold 0

Median prices, average days on market

current for sale           26 med price $697,000; avg days on market 194

current sale pendings  3  med price $599,950; avg days on market 131

sold in last 6 months    6 med price $675,000; avg days on market 184

New Listings none

Price Reductions none

Sale Pendings

We're sorry, but we couldn't find MLS # 21018671 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

Solds none

Home values nationwide declined 2.6 percent in the fourth quarter of 2010, the largest quarterly decline since the first quarter of 2009, according to Zillow’s Home Value Index.  Year-to-year, the Index declined 5.9 percent. Home values have fallen 27 percent since they peaked in June 2006, according to Zillow’s report.

Accelerating home value declines, as well as a slowdown in the nation’s foreclosure rate following the late-2010 robo-signing controversy, contributed to an increase in negative equity. At the end of the fourth quarter, 27 percent of single-family homeowners with mortgages owed more on their mortgage than their homes were worth, an increase from 23.2 percent in the third quarter. 

The accelerated decline in home values brought trouble for home sellers, as more were forced to sell their home for less than the price paid. The rate of homes selling for a loss reached a new peak in December, with more than one-third selling for a loss. The rate of homes sold for a loss has increased steadily for the past six months.

Reprinted from C.A.R. Newlines. 

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

Although the volume of distressed non-agency residential mortgage properties in the U.S. continues to decline, the pace of moving distressed properties through the foreclosure process continues to slow, according to Standard & Poor’s Ratings Services.  S&P currently estimates that the principal balance of these distressed homes amounts to about $450 billion, representing nearly one-third of the non-agency residential mortgage-backed securities market.  This shadow inventory of distressed properties is defined as outstanding properties whose borrowers are (or recently were) 90 days or more delinquent on their mortgage payments, properties currently or recently in foreclosure, or properties that are real estate owned.

At the end of fourth-quarter 2010, S&P estimated it will take 49 months, or more than four years, to clear the supply of distressed homes on the market in the U.S. as a whole. This is an 11 percent increase over the previous quarter and a 40 percent increase from fourth quarter 2009 for the average time to clear these properties in the U.S.

Reprinted from C.A.R. Newlines. 

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

Most home buyers who claimed the federal tax credit of up to $7,500 for buying their first home in 2008 are required to start repaying the credit in 15 annual installments, beginning with their 2010 tax returns.

The credit—some form of which was offered for qualified home purchases in 2008, 2009, and 2010—has different repayment rules depending on when and under what circumstances the home was purchased. As tax season approaches, this may cause confusion among home buyers who received the tax credit.

The IRS is sending a letter to taxpayers who claimed the credit that explains if, when, and how the buyer has to repay the credit. There are different IRS letters for different situations, including a purchase of a home in 2008, 2009, or 2010; a sale of a main home; or a change in the use of the main home.

The IRS website at www.irs.gov contains detailed information about repayment requirements for the federal home buyer tax credit. For information about the tax benefits of homeownership, go to NAHB’s website www.SaveMyMortgageInterestDeduction.com.

Reprinted from C.A.R. Newlines. 

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

California home sales rose in January, marking three consecutive monthly increases and posting their highest level since May 2010, while the statewide median price declined to its lowest level since June 2009, according to data C.A.R. 

“With lower home prices and rates edging up from their historic lows of late last year, prospective home buyers should consider the opportunities in today’s market,” said C.A.R. President Beth L. Peerce.

California home sales rose 5.1 percent in January compared with December, to a revised pace of 520,080 units.  Sales also increased 2.5 percent in year-over-year comparisons, marking the first year-over-year sales increase since May 2010.  The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the January pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

Reprinted from C.A.R. Newlines. 

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®