Spotlight: California
ABOUT 45 PERCENT OF THE NATION’S $5.7 TRILLION IN LOST HOUSING WEALTH FROM MID-
2006 THROUGH MID-’09 CAME FROM CALIFORNIA, ACCORDING TO A DEUTSCHE BANK RE-
PORT ON ASSET-BACKED-SECURITIES.
The Golden State also had the fourth-worst foreclosure rate among states this past February, and 35
percent of in-state mortgages were underwater in the fourth quarter of ’09, according to Realty Trac
and First American CoreLogic.
Despite the gloom, recovery appears afoot in coastal California. None of that state’s 15 of 58 counties
bordering the Pacific Ocean ranked among the state’s 20 worst by foreclosure rate this past February. In contrast, almost two-dozen inland counties saw more than one foreclosure filing for every 200
housing units that month. Skeptics say the problem is even worse, with banks potentially delaying
foreclosure filings. These foreclosures might only be the “tip of the iceberg,” Southern California
analyst Bruce Norris says.
Federal efforts offer some help. Through this past February, California led all states with more than
205,000 permanent and active trial modifications under the Home Affordable Modification Program,
according to the U.S. Treasury Department. Then again, California also led states in the number of loans
serviced — 5. 8 million in the fourth quarter of ’09, according to the Mortgage Bankers Association.
Population patterns
In the 12-month period ending July
’09, California’s population grew at
its third-slowest annual rate since
1900. That marked the fifth-straight
California fiscal year in which the
state had negative net domestic migration, with it losing 141,865 residents to other states. More than a
half-million births and about 37,000
documented and undocumented immigrants pushed up the most-popu-lous state’s overall resident count by
0.93 percent, according to an annual
state Department of Finance study.
CALIFORNIA POPULATION GROW TH RATE
Source : California Department of Finance
3 Regions to Watch
LOS ANGELES COUNT Y
Home to more than a quarter of state residents,
Los Angeles County experienced a 6.7-percent
spike in home prices — new and existing combined — from January ’09 to ’ 10, according to research firm DataQuick. But city-specific changes
vary widely. For example, while Sherman Oaks’
median home price increased 29 percent, West
Hollywood’s decreased 51.5 percent.
SAN FRANCISCO
One of California’s premier property markets,
the City by the Bay appears on the mend. Its
unsold single-family inventory dropped from
5. 3 months’ worth in February ’09 to 2.6 months
this February, according to the San Francisco
Association of Realtors. In addition, year-to-year
prices were up 12. 3 percent this past January.
Delinquencies
California’s delinquency rates
jumped in all major loan categories
between the fourth quarters of ’08
and ’09, according to the Mortgage
Bankers Association. The state’s
overall delinquency rate of 11. 3 percent also exceeded the national
average of 10. 4 percent. Subprime
loans experienced the biggest spike
in overall delinquency and severe
delinquency, which includes loans
90 or more days past due.
Home sales
SEVERE-LOAN-DELINQUENCY RATES
Source: Mortgage Bankers Association
MERCED COUNT Y
Among the country’s hardest-hit property markets, this northern inland region had the nation’s seventh-worst foreclosure rate this past
February — one filing for every 122 households
— and the state’s lowest median home price
this past January, according to RealtyTrac and
the California Association of Realtors. With
21.7-percent unemployment this past January,
recovery here seems distant.
Year-to-year existing-home sales slipped for the first time in 21 months this past January, according to
the California Association of Realtors. Sales decreased 10. 6 percent from January ’09 to ’ 10, but the
total remained greater than 500,000 units for the 17th-straight month. This decline came at the same
time the state’s year-to-year median home price experienced its largest spike — 15 percent — since
December ’04 to ’05, the association reported. As of this past November, California’s median existing-home price was 46.1 percent off its July 2006 peak, according to First American CoreLogic.
Largest median-price increase by county, January ’09 to ’10: 1. Santa Barbara (+ 23 percent to $300,000)
2. Contra Costa (+ 14. 8 percent to $252,500)
3. Orange (+ 13. 5 percent to $420,000)
Largest median-price decrease by county, January ’09 to ’10: 1. Madera (- 19. 7 percent to $124,500)
2. Shasta (- 15. 7 percent to $177,000)
3. Nevada (- 12. 4 percent to $300,000)
“For qualified borrowers with jobs and good
credit, this is a great time to buy. But shadow
inventory is a big concern. We know that lenders
are getting backlogged with properties. My
opinion is that the banks are stringing the
modification process along so they don’t have
to put those losses on their books yet.”
— JANA M. LANE, CER TIFIED MORTGAGE ADVISER,
PROSPEC T MOR TGAGE
WHAT THE LOCALS SAY
Source: California Association of Realtors
Darrick Meneken is an associate editor at Scotsman Guide. Reach him at (800) 297-6061 or darrickm@scotsmanguide.com.
Sources: California Association of Realtors, California Department of
Finance, California Employment Development Department, DataQuick,
Deutsche Bank, First American Core Logic, Housing Wire, Mortgage
Bankers Association, Mortgage Banking, Nu Wire Investor, Realty Trac,
San Francisco Association of Realtors, The Californian.com, U. S. Census
Bureau, U. S. Treasury Department.
