Feb numbers from DataQuick

The Feb numbers from DQ are out. The sales numbers for the IE took a pretty good dive and the median price was nearly unchanged from last year. San Berdu was down 10% and Riverside was down 6.5%. That's not good considering the tax credit and low rates right now. DQ also mentions the uptick in flipping. Some of those sales can probably be backed out as those flips count as two sales. Take the flips away and the market is probably worse than the numbers indicate. In any case a that's a fairly big dive in sales numbers versus last year. The sales numbers were about the same as Jan for Riverside but San Berdu saw a 7% drop. Median price was the same in San Berdu and Rivy managed a $2K gain. Median price seems to have stabilized some what on a county wide basis for both counties.

A total of 15,359 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was virtually unchanged from 15,361 in January, and up 0.8 percent from 15,231 in February 2009, according to MDA DataQuick of San Diego.

The February sales average is 17,983 going back to 1988, when DataQuick’s statistics begin. The sales distribution remains tilted toward lower-cost distressed homes, although not as steeply as most of last year.

“It’s possible the stars won’t line up this way again for many years. With prices and mortgage interest rates this low, the cost of ownership is about as low as we’ve seen it in decades,” said John Walsh, MDA DataQuick president.

The median price paid for a Southland home was $275,000 last month, up 1.3 percent from $271,500 in January, and up 10.0 percent from $250,000 for February 2009.

Foreclosure resales accounted for 42.3 percent of the resale market last month, up from 42.1 percent in January, and down from 56.7 percent a year ago, which was the all-time high.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 38.5 percent of all home purchase loans in February.

Absentee buyers – mostly investors and some second-home purchasers – bought 18.9 percent of the homes sold in February. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 29.3 percent of February sales. In January it was a revised 29.7 percent – an all-time high. The 22-year monthly average for Southland homes purchased with cash is 13.8 percent.

The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a three-week to six-month period was 3.4 percent, up from 1.6 percent a year ago. Last month the flipping rate varied from as little as 2.8 percent in Riverside and Ventura counties to as much as 4.1 percent in Los Angeles County.

	Sales Volume			Median Price
All homes	Feb-09	Feb-10	%Chng	Feb-09	Feb-10	%Chng
Los Angeles	4,590	5,034	9.7%	$299,000	$315,000	5.4%
Orange	1,879	1,986	5.7%	$375,000	$417,000	11.2%
Riverside	3,420	3,199	-6.5%	$190,000	$197,000	3.7%
San Bernardino	2,324	2,095	-9.9%	$153,000	$150,000	-2.0%
San Diego	2,473	2,465	-0.3%	$285,000	$322,000	13.0%
Ventura	545	580	6.4%	$327,000	$350,000	7.0%
SoCal	15,231	15,359	0.8%	$250,000	$275,000	10.0%

1099 releif

The Ca assembly passed the short sale tax relief and have sent it off to Arnold to sign. I read he may veto is as there is some additional provisions he does not like regarding tax fraud. I'm sure this will eventually get passed and the short sellers will get off the hook. However not everyone will get off. Both the state and federal tax relief only applies to purchase and refi loans. Home ATM loans (HELOCs) are still taxable. This is why the short sellers really need to get some good tax advice before selling. Vacation and rental properties are also not eligible for tax relief.

Here's some scary data for Housing Wire.

Using LPS data, for all loans more than 90 days in arrears, the average days delinquent is now at 272 days—up from 204 days in early 2008. For loans in foreclosure, the aging numbers are even more staggering: loans in this bucket average 410 days delinquent, up from 260 days delinquent in early 2008.

Ponder those numbers for just a second. On average, severely delinquent borrowers have gone more than 9 months without making a mortgage payment—and yet foreclosure has not yet started for them. For those borrowers who are in the foreclosure process, it’s been an average of 13.6 months—more than one full year—since they last made any payment on their mortgage.

So, can short sales ride in to save the day for these 7.4m troubled borrowers? What about for the many millions more who are current on their loans, but are underwater on property value and unable to sell? For some, short sales will be an important solution—but don’t kid yourself: the hype currently surrounding short sales and the HAFA program will prove to be short-lived, and REO expertise will be prove to be the key to recovery, as it has been in prior cycles.

Here's some government propaganda regarding the HAMP program (Loan Mods). Check out the chart on page 6. Before mods the average back end DTI was 76.4%! Damn Batman after you pay taxes what's left to buy food and pay utilities. It really does make you wonder what in the hell banks were thinking making these loans. 76 freaking pecent DTI...amazing. And the scary part is the back end DTI after mod is averaging nearly 60%. These people are still one paycheck away from the street, eating Ramen noodles and Hamburger Helper for dinner.

There are some other shocking numbers in the report. All the perment mods got an interest rate reduction, 40% of them got the loan extended, and 27% got a principal forebearance. (not a principal reduction!). You can see that a lot of these loan mods are time bombs unless by some miracle prices bubble up again. The average savings is a little over $500/mo.

Welcome to the Bail Out Generation! (We are the BOGs)

Friday humor

Unemployment hits new high, and state tax releif for short sales?

Inland Southern California's job base continues to absorb body blows, as January's unemployment soared to an all-time high of 15 percent, a state report released Wednesday found.

Two years of recession has cost Riverside and San Bernardino counties more than 160,000 jobs, the state Employment Development Department reported. That means that there are no longer jobs for roughly one in eight Inland residents who had been working before 2008 started. It also means the recession has wiped out the five years of solid growth the Inland area experienced before the collapse of housing-related industries pulled the economy into an abyss. And the damage has not stopped. The January jobless rate, up from 14.1 percent in December, is more than three times what it was four years ago, when virtually everyone looking for a job in the Inland area found one. Part of the increase was attributed to people who had stopped looking for work but decided to get back into the job market after the first of the year.

The jobless rate was 15.1 percent in Riverside County and 14.8 percent in San Bernardino County. Riverside County almost always has higher unemployment because it's computed based on home addresses, and Riverside County has more residents who commute to other counties.

There was job growth in 31 states, although in many cases it wasn't enough to lower the unemployment rate. California's unemployment of 12.5 percent was the fifth highest. Despite some ripples of economic life, there are no clear signs employers will be hiring. Matt Thalmeyer, president of Arrow Staffing, a Redlands-based temporary agency, said there have been short stretches in the early weeks of 2010 when orders for workers picked up, but they don't last. And, there is still a steady flow of applicants looking for short-term jobs, he said.

"Our clients are saying they're not expecting to do much of anything, and maybe not even anything big, until the third or fourth quarter," Thalmeyer said. The state is reporting about 74,000 fewer Inland residents were drawing paychecks in January than in the same month in 2009

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Tax relief for short sales from the state might be coming. Most people know the federal gov has a program to forgive the taxes on the forgiven debt from a short sale or foreclosure. Few people know that you are still on the hook for state tax though.

State legislation to protect people who lose their houses in foreclosure or short sales from a big tax bill passed a significant hurdle this week, winning Assembly approval. The state Senate is expected to vote on the proposal Thursday.

Passing the Assembly by a 47-27 vote, the bill authored by Sen. Lois Wolk (D-Davis) would exempt people who did short sales or received loan modifications or lost their houses in foreclosure last year from having to pay state tax on any mortgage debt that was forgiven. Otherwise the forgiven debt would be considered income for the homeowners even though they received no money from the sale of their home.

Both the state and federal government extended a lifeline to homeowners in 2007 when the market was flooded with mortgage failures by temporarily exempting the tax on forgiven debt. However, while the federal exemption continues through 2012, the state's expired at the end of 2008.

Winter said a person with an annual income of $50,000 and $100,000 of debt cancelled on a house would be "on the hook" for about $8000 in additional income tax. He said most likely some of his clients would be forced into bankruptcy.

Many people who thought they were exempt from the debt forgiveness tax under both the state and federal law, Hewitt said, were shocked to receive 1099 forms in the mail from their lenders that need to be filed with their tax returns to report the cancelled debt.

As state law now stands not all homeowners who have a foreclosure, short sale or loan modification will take a state tax hit. According to the Senate Revenue and Taxation Committee, for example, debt forgiven on a first mortgage used to buy a house even now is not taxable. That is not true, however, if the original mortgage is refinanced and money taken out to buy a car or for another investment.