Realty Digest Blog

Where’s the Foreclosure Flood?

Scot Campbell — Wed, 08 Feb 2012 01:01:06 +0000

Where are the foreclosures going?

by Scot Campbell – 2/7/2012

Homebuyers have been told there is a “shadow inventory” of foreclosed homes, so naturally they want to know “Where are they?”

Alan Mallach, a senior fellow at the Brookings Institution, helps explain why more properties have NOT ended up on the market as foreclosure resales.

Sometimes the owner cures the default (meaning he borrows or finds the money necessary to take the home out of foreclosure).
Sometimes the owner requests a loan modification, and the foreclosure sale is postponed.
Sometimes the owner is granted a loan modification, stays current, and the foreclosure sale is cancelled.
Sometimes the owner does a short sale, and the foreclosure sale is cancelled.
Sometimes the foreclosure sale takes place, but the property is bought by a third party.

Therefore, there are several alternative scenarios to the foreclosure sale. With 3rd party investors buying properties at the foreclosure sale, and banks ramping up their efforts to sucessfully grant loan modifications and approve short sales, the “flood” of Bank Owner properties offered to the public will remain below the expectations of many hopeful homebuyers.

During 2011 in Huntington Beach, about 13% of the home sold were bank owned… a small number considering how many homes are in default. Where are the other homes going? Well, about 20% of the homes sold in Huntington Beach during 2011 were “short sales” and most of these homes were ”in foreclosure”… but never became “Bank Owned”.

So, if you are an investor or bargain home shopper, it is good to watch our Bank Owned Homes For Sale website: www.SoCalBankOwnedHomes.com… but you should also watch our Short Sale Homes For Sale website: www.SoCalShortSaleList.com if you want to learn about all of the Foreclosure Properties.

For questions about buying and selling real estate in Orange County, contact Scot Campbell. He is the President of The Scot Campbell TEAM at Coldwell Banker-Campbell Realtors in Huntington Beach, CA. He has been a licensed broker for over 21 years and has brokered over 1000 homes and just about every type of transaction imaginable. Read his profile and client reviews at www.ScotCampbell.com He can be reached at 714-960-0700 at the office, 714-336-0394 on his mobile number or via email at Scot.Campbell@ColdwellBanker.com

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How’s the Market for Single Family Homes?

Scot Campbell — Tue, 07 Feb 2012 04:34:29 +0000

Huntington Beach Single Family Homes January 31, 2012 Update

By Scot Campbell– February 6, 2012

Ground Hog Day is past and the unofficial beginning of the spring home buying season is upon us. So, will there be six more weeks of “housing market winter” or will spring be sprung early?

You will be pleasantly surprised to hear that the number of Huntington Beach single family closed sales in the first 31 days of 2012 is higher than 2011… nine more sales this year than last, which is a 16.07% increase.

The average price per square foot was down 5% from 2011 to $335.41.

The average days on market fell from 115 to 101.

The average discount from original list price was just 6% compared to 8% in 2011.

So, the market statistics are all improving except for average price per square foot… will this be the transition year for prices? It is too early to tell… but I will be reporting again in about 30 days.

This spring will be a very good time to buy and sell as mortgage interest rates offer an affordability window which lets buyers lock in a low payment and sellers find a ready, willing, and able buyer.

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How’s the Market for Condos & Townhouses?

Scot Campbell — Tue, 07 Feb 2012 04:30:21 +0000

Huntington Beach Condo & Townhome Market Update January 31, 2012

By Scot Campbell– February 6, 2012

Ground Hog Day is past and the unofficial beginning of the spring home buying season is upon us. So, will there be six more weeks of “housing market winter” or will spring be sprung early?

You will be pleasantly surprised to hear that the average price per square foot for condos & townhomes increased in the first 31 days of 2012 compared to 2011. It was not much of a jump… just 0.63% with the average price per square foot going from $279.75 to $281.52.

The number of Huntington Beach condos & townhomes closed sales in the first 31 days of 2012 was stable compared to 2011.

The average days on market increased from 123 to 129.

The average discount from original list price was just 8% compared to 10% in 2011.

So, the market appears to be improving… will this be the transition year for prices? It is too early to tell… but I will be reporting again in about 30 days.

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Real Estate Economics issues 2012 Forecast

Scot Campbell — Mon, 06 Feb 2012 21:10:07 +0000

Mark Boud of Real Estate Economics published their National 2012 Real Estate Market Forecast on January 30, 2012.

Mr. Boud consults mostly merchant builders on market conditions so they may make better decisions on current and future building projects under consideration.

Here is a summary of his research:

There are strong signs of private employment growth nationally (and in Orange County). But, the public sector will continue to shed jobs.
Housing construction is near an all-time low, but multi-family building permits have increased… builders are focusing on construction of apartments rather than homes.
Housing Affordability is near an all-time high. A severe over correction is already well established.
High numbers of defaults continue, but percentage of past due mortgage payments fell below 8% for the first time since the 4^th Quarter of 2008.
Price changes will range between -3% and +3% in most areas.
Transaction volume has increased, reflecting the beginnings of market stability and improved economic expectations.
Market improvements in Year 2012 will initially be driven by under valuation and improved consumer sentiment as opposed to economic growth.
Market demand in the next housing cycle will be driven by mature buyers, mobile buyers (chasing jobs) and international buyers looking to invest in the U.S.

To listen to the entire webinar, goto: http://youtu.be/rt_ZzzMl4BU

Certainly Mr. Boud’s research echos the thoughts of Kiplinger and others who say “the worse is over”. And, the combination of positive job growth, falling mortgage defaults, historic low interest rates, high affordability, and record low new home construction are all factors which point to at least a slow but gradual improvement in the housing market by the end of 2012 or 2013.

According to Mr. Boud’s research, the market will most likely not “zoom up” anytime soon, but at least buyers will be able to purchase without the fear of a dramatic drop in prices.

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Demand surges 24% in just two weeks.

Scot Campbell — Mon, 06 Feb 2012 15:51:58 +0000

It is time to get realistic for buyers looking to purchase a home in OC below $750,000.

02/04/2012 – Source: Steven Thomas – Quantitative Economics and Decision Sciences

I talk to REALTORS® out in the trenches and they all say that most buyers that are new to the market are unrealistic in their expectations. Flip on the news, open up the papers, talk to a neighbor and one would believe that the market is flooded with foreclosures and that prices are falling like a rock. The expectation is that there are plenty of homes on the market and that there is little competition to purchase. They assume that they can get a “deal” and will be able to get a 10 to 20% discount off of the asking price. It is time to tackle these myths one at a time. First off, the market is NOT flooded with foreclosures. Instead, there are currently less than 550 foreclosures on the active listing inventory and they fly off the market. That’s only 7% of the total active inventory. Almost every buyer would like to buy a foreclosure but there simply are not enough of them to go around. Thus, the expected market time had dropped to a little over one month, an extreme sellers market. For all closed sales over the past year, the average reduction off of the asking price is only 3%. 3% is not 5% and it is not 10% and it is definitely not 15 or 20%. 3% is 3%. That means that for a home priced at $500,000, the average reduction is only $15,000. Writing an offer with a $50,000 discount will result in nothing more than a waste of everybody’s time. Instead, buyers should approach the market with the knowledge that the inventory is low and that there will be a lot of competition within the marketplace. Rather than approaching with the anticipation of getting a certain set discount on the purchase of a home, be prepared to carefully scrutinize the most recent comparable sales and pending sales data. Buyers rightfully don’t want to overpay for a home, but they should sharpen their pencils and submit offers to purchase at or very close to the fair market value of a home. Having the proper mindset is the difference between success and coming up empty handed and frustrated.

Demand: Orange County housing demand is taking off.

Typically Super Bowl Sunday marks the beginning of the Spring Market. I would argue that the housing market is experiencing an early spring that started in mid-January. Could it be the warm weather that is stimulating demand? Record low interest rates? Experts declaring that a bottom has been reached? It’s probably a case of “all of the above,” plus a bit of optimism going into a New Year. Regardless, the housing market has absolutely surged and it is not due to a first time home buyer tax credit or other government program. Sure the Federal Reserve has kept rates at historically low levels, but buyers have proven that they are not motivated by interest rates; motivation is more about the belief that it is the right time to purchase. That belief is starting to break through in today’s housing market. Affordability is currently at a point not seen in well over a decade. Payments for the median sales price home have not been this low since 1999. There are many instances throughout Orange County where even after factoring the mortgage payment, taxes, insurance, and homeowner association dues, the total real payment, it is still cheaper than renting within the same neighborhood. Overall, demand, the number of new pending sales over the prior month, is up 13% compared to 2011, and now totals 3,134 pending sales. In the past two weeks alone, demand increased by 24%. For homes priced below $500,000, demand is up 26% compared to last year and the expected market time is a sizzling 1.9 months. For homes priced above $500,000, demand is actually less than one year ago; however, that is mostly due to a much smaller inventory compared to last year. In looking at the expected market time for various ranges, with the exception of homes priced between $1.5 million and $4 million, the market is stronger today compared to last year.

The Active Listing Inventory: The listing inventory took another unprecedented drop.

This is the second report in a row where the active listing inventory dropped. That wipes away any speculation that we had just experienced a periodic data anomaly. Instead, this is proving to be a trend. The current active listing inventory shed 257 homes in the past two weeks and now totals 7,823. You have to wind the clock all the way back to January 2010 to find the last time the inventory was this low. Back then the inventory was climbing. Last year the listing inventory was at 10,389, that’s an additional 2,566 homes on the market. Today, with fewer homes on the market, demand has soared. It’s basic Econ 101: when supply drops, demand increases. The inventory is dropping because homes are flying off the market at a faster pace than they are coming on. I am still concerned that eventually word of the incredibly hot activity, multiple offers and sales prices at or close to their asking prices will spread like a wild fire and motivate many homeowners to cash in on a “better market.” Sellers can be just as unrealistic as buyers. Many assume that all of this activity translates to appreciation, or the ability to procure a buyer willing to pay extra for their home.

Here’s another REALITY CHECK: buyers are not willing to pay a premium for a home yet. There are still a lot of distressed homes on the market, which ultimately keeps a lid on any real appreciation. So, if you are a seller, I beg of you, please do not place your home on the market at an unrealistic value higher than the true market value. If you choose to ignore my advice, be prepared to sit on the market for months, a futile waiting game for a buyer willing to overpay simply because there is a lot of activity. If the market becomes flooded with these unrealistic, overpriced sellers, the active listing inventory will balloon and demand will drop, simple Econ 101.

The Distressed Market: The distressed inventory hasn’t been this low since February 2010.

In Orange County, the active distressed inventory, both short sales and foreclosures combined, dropped by an unbelievable 299 homes and now totals 2,691. That’s the largest drop since March of last year. Last year at this time, the distressed inventory was at 4,104 foreclosures and short sales, 1,413 more than today. Currently, the distressed inventory represents 34% of the active inventory. In the past two weeks, the foreclosure inventory dropped by 24 homes and now totals 546. You have to go all the way back to June 2010 to find fewer foreclosures on the market. Foreclosures will be a very hot commodity throughout 2012. The expected market time is an unbelievable 1.1 months, a deep sellers market. The short sale inventory decreased by 245 homes in the past two weeks and now totals 2,175. That’s the lowest since December 2009. The expected market time dropped to 1.6 months, also a deep sellers market. The big difference between foreclosures and short sales is that the closing date for short sales cannot really be predetermined. There are great deals in the short sale arena, but it comes at the expense of an unknown closing date. Lender approvals can take anywhere from a month to months. And, some short sales just don’t come together when all parties cannot seem to agree. That’s often the case when there are multiple lenders, unpaid homeowner association dues, unpaid property taxes, tax liens, judgment liens and/or attorneys involved.

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Record Low Mortgage Rates, O.C. Employers hire 24,600

Scot Campbell — Thu, 02 Feb 2012 15:46:05 +0000

Low mortgage rates and positive job growth are both highly correlated with a healthy housing market, so it was interesting to see today that mortgage interest rates hit another low and Orange County added a significant number of jobs in 2011 (the highest number of new jobs since 2006).

Brian Lewis reported in Bloomberg today that mortgage rates hit another all time low:

Rates for 30-year U.S. mortgages declined to the lowest level on record after the Obama administration announced measures to make it easier for homeowners to reduce their monthly payments by refinancing.

The average rate for a 30-year fixed loan fell to 3.87 percent, the lowest in records dating to 1971, from 3.98 percent in the week ended today, Freddie Mac said in a statement. The average 15-year rate dropped to 3.14 percent from 3.24 percent, according to the McLean, Virginia-based mortgage- finance company.

According to a report in the Orange County Register, Mary Ann Milbourn on February 2nd, 2012:

The Orange County-Los Angeles area ranked fourth in job growth among 372 metropolitan areas last year, reports the U.S. Bureau of Labor Statistics.

All told, the OC-LA area added 41,900 payroll jobs in 2011. Orange County alone accounted for more than half of that with local employers hiring 24,600 new workers — the best since November 2006 when the county created 25,100 jobs.

Low mortgage rates and continued job growth in the months ahead will help the Huntington Beach housing market. It may be a very strong spring homebuying season.

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California & O.C. Foreclosure Activity Drops

Scot Campbell — Fri, 27 Jan 2012 04:53:56 +0000

Mortgage Defaults are Dropping in California

Source: Dataquick January 24, 2012

The number of California homes going into foreclosure dropped in the fourth quarter of 2011 to the second-lowest level in more than four years, the result of evolving lender and mortgage servicer policies as well as shifting market conditions.

A total of 61,517 Notices of Default (NODs) were recorded at county recorders offices during the fourth quarter. That was down 13.7 percent from 71,275 for the prior three months, and down 11.9 percent from 69,799 in fourth-quarter 2010, according to San Diego-based DataQuick.

Last quarter’s 61,517 NODs marked the lowest level since 56,633 NODs were filed in second-quarter 2011, and the second-lowest since 53,943 NODs were recorded in second-quarter 2007. New foreclosure filings (NODs) peaked in first-quarter 2009 at 135,431.

Orange County saw fourth-quarter foreclosure filings fall from 4,388 in 2010 to 4,297 in 2011… a 2.1% decrease. And, for all of 2011, Orange County foreclosures were down 8.7% according to the O.C. Register, for details see: http://lansner.ocregister.com/2012/01/27/foreclosures-down-8-7-in-11/157393/

“We are certainly seeing a lower level of foreclosure activity than a year or two ago. The question is, how much of that decline is due to market conditions, and how much is due to policy changes that try to address economic distress and lower home values,” said John Walsh, DataQuick president.

“Five years ago almost all mortgage payment delinquencies would have triggered a default notice after a certain amount of time. Strategies now include short sales, refinances, interest rate changes, principal reduction as well as just plain waiting longer. It will be interesting to see how this plays out as the economy improves and the housing market finds its footing,” Walsh said.

Most of the loans going into default are still from the 2005-2007 period: The median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for three years, indicating that weak underwriting standards peaked then.

As the foreclosure problem surged four years ago, newer neighborhoods in affordable areas were hit the hardest. The problem spread gradually into other areas, but that spreading appears to have leveled off. In third-quarter 2008, well over half of all recorded NODs were in neighborhoods that represented one-fourth of California’s housing stock. By third-quarter 2010 those neighborhoods’ share of all NODs had fallen to 41.1 percent as other neighborhoods got hit, too. But more than a year later, in fourth quarter 2011, the relatively affordable neighborhoods’ NOD share wasn’t much different – 37.9 percent.

While the number of mortgage defaults dropped across all home-price ranges last quarter, NODs remained far more concentrated in the more affordable areas. Zip codes with median sale prices last year below $200,000 collectively saw 9.4 NODs for every 1,000 homes, while the ratio was 7.0 NODs per 1,000 homes for all zips statewide, and 2.3 NODs per 1,000 homes in zip codes with 2011 median sale prices above $800,000.

On primary mortgages, California homeowners were a median nine months behind on their payments when the lender filed the Notice of Default. The borrowers owed a median $19,949 on a median $333,036 mortgage.

Although 61,517 default notices were filed last quarter, they involved 60,289 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit).

Of the state’s larger counties, mortgages were least likely to go into default in San Francisco, Marin and San Mateo counties. The probability was highest in Sacramento, San Joaquin and Stanislaus counties.

Trustees Deeds recorded (TDs), or the actual loss of a home to the formal foreclosure process, totaled 31,260 during the fourth quarter. That was down 19.6 percent from 38,895 for the prior quarter, and down 11.8 percent from 35,431 for fourth-quarter 2010. The all-time peak was 79,511 in third-quarter 2008. The state’s all-time low was 637 in the second quarter of 2005, DataQuick reported.

Just as with mortgage defaults, foreclosures remained far more concentrated in the state’s most affordable neighborhoods. Last quarter zip codes with 2011 median sale prices below $200,000 collectively saw 6.0 foreclosures for every 1,000 homes, compared with 3.7 foreclosures per 1,000 homes for all zip codes statewide and less than one – 0.7 – foreclosure per 1,000 homes in zip codes with $800,000-plus medians.

There are 8.7 million houses and condos in the state.

On average, homes foreclosed on last quarter took 9.7 months to wind their way through the formal foreclosure process, beginning with an NOD. That’s roughly even with 9.9 months the prior quarter and up from 8.8 months a year earlier.

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Coldwell Banker iPad App being widely adopted

Scot Campbell — Thu, 26 Jan 2012 20:14:32 +0000

Former computer users are jumping to Apple iPad and Android tablet devices to shop for homes, and Coldwell Banker has the top iPad App among national real estate brands.

Here is a video link: http://youtu.be/_c032wtZLYA

The Coldwell Banker iPhone App was the first among national real estate brands and remains at the top of the list in features and listings.

Here is a video link: http://youtu.be/zsg6wRJHHnA

Of course there is a whole other world out there besides Apple products, so Coldwell Banker also created an App for Android users, and it is highly rated for its unique new features:

Here is a video link: http://youtu.be/FNp1BkkcJ9Q

Some people love their Blackberry device and will never give it up… and Coldwell Banker first introduced their Blackberry App back in 2008 and it has been continuously updated.

Here is a video link: http://youtu.be/hA7NCyFMiCI

With all of the mobile platforms having access to ColdwellBanker.com, ColdwellBankerPreview.com, and Coldwell Banker On-Location on YouTube: iPad, Tablet, iPhone, Adroid, & Blackberry… plus millions of users who still like to search listings from their desktops and laptop computers, it is no wonder that the Coldwell Banker websites had 17.5 million unique visitors in 2011, which was more than 28 percent higher than the next nearest franchise brand competitor (13.7 million). According to the respected Nielsen ratings firm.

Similarly, Coldwell Banker branded websites for individual market areas around the country, (26.1 million unique visitors) had the highest Web traffic ranking among real estate franchisors in the comScore Media Metrix full-year ranking for 2011, easily outpacing its next nearest competitor by 21 percent (21.6 million unique visitors). The Coldwell Banker brand continues to place an emphasis on developing its website into a hub for consumers to find and prepare for the home buying and selling process.

Coldwell Banker is the leader in your community and around the globe. With over 7,000 agents in over 100 locations, no one sells more homes in Southern California than the Coldwell Banker Brand.

Globally, Coldwell Banker Real Estate has over 3,300 locations in 50 counties and territories connecting you to buyers and sellers around the world.

“Coldwell Banker Advertises your home in ways others can’t.”

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Coldwell Banker Websites Earn Top Honors… Again

Scot Campbell — Thu, 26 Jan 2012 16:56:44 +0000

Coldwell Banker Branded Websites Remain Most Visited

01-26-2012

PARSIPPANY, N.J. (Jan. 26, 2012) – According to Nielsen and comScore Media Metrix, the two global leaders in digital measurement, Coldwell Banker branded websites had the highest number of unique visitors among all national real estate franchise brands for full-year 2011. This marks the second consecutive year that the Coldwell Banker brand ranked No. 1 in Web traffic among all real estate franchisors.

“The Coldwell Banker brand is clearly top of mind when consumers go online and search for a home,” said Michael Fischer, chief marketing officer, Coldwell Banker Real Estate LLC. “Consumers know our great brand and have shown a desire to utilize the suite of online tools seen throughout the Coldwell Banker network at the national and local levels.”
According to Nielson, Coldwell Banker websites had 17.5 million unique visitors in 2011, which was more than 28 percent higher than the next nearest franchise brand competitor (13.7 million). Similarly, Coldwell Banker branded websites (26.1 million unique visitors) had the highest Web traffic ranking among real estate franchisors in the comScore Media Metrix full-year ranking for 2011, easily outpacing its next nearest competitor by 21 percent (21.6 million unique visitors).The Coldwell Banker brand continues to place an emphasis on developing its website into a hub for consumers to find and prepare for the home buying and selling process. Recent additions include thelifestyle search page and first time home buyer resource center.

Coldwell Banker Real Estate LLC accessed the aforementioned information through its subscription to both Nielson and comScore Media Metrix. The rankings encompass all consumer Web traffic (unique visitors) to national and local websites operated by the franchise brands as well as by their franchisees

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Socal Home Sales Surge in December 2011

Scot Campbell — Sat, 21 Jan 2012 04:07:58 +0000

January 2012 - Investors Share of Market is Increasing

Source: Dataquick – 01/17/2012

La Jolla, CA—Southern California home sales surged last month from November – as they normally do – amid relatively strong activity under $300,000 and a record share of sales to “absentee” buyers, mainly investors. But with the purchase plans of many ordinary buyers and sellers still on hold, the year-end rush couldn’t lift sales above December 2010. Moreover, investors’ focus on lower-cost homes helped push the median sale price back down to its 2011 low point.

A total of 19,247 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in December. That was up 14.0 percent from 16,884 in November but down 1.4 percent from 19,528 in December 2010, according to San Diego-based DataQuick.

In Orange County, the year-over-year sales volume was down 6.10%, and the median price was down 2.4% compared to December 2010.

It’s normal for sales to jump between November and December, in part because some investors want to close their deals before year’s end for tax reasons. On average, sales have risen 13.2 percent between November and December since 1988, when DataQuick’s statistics begin.

December home sales have varied from a low of 13,240 in 2007 to a high of 36,865 in 2003. Last month’s sales were 22.0 percent lower than the December average of 24,656 since 1988.

While December sales of existing (not new) houses and condos combined fell 0.5 percent from a year earlier, sales of newly built homes fell 12.0 percent year-over-year, to the lowest level on record for a December.

“Last year ended much the way it began, with pitifully low new-home sales, record investor activity, drum-tight credit, and lots of potential buyers and sellers just sitting tight,” said John Walsh, DataQuick president.

“Some of the economic vital signs have improved lately and it’s sparked a renewed sense of optimism in housing circles,” he said. “Coupled with incredibly low mortgage rates, it certainly suggests 2012 might offer the ‘rock bottom’ for pricing that many buyers and sellers have been waiting for. But the housing drama isn’t over. Credit conditions remain horrible, leaving many unable to take advantage of today’s improved affordability. And lenders still must decide the fate of scores of borrowers who aren’t making their mortgage payments.”

December’s sales trends varied significantly by price segment. The number of homes that sold for less than $200,000 last month rose 5.9 percent from a year earlier, while the number of transactions between $300,000 and $800,000 dropped 10.7 percent and sales above $800,000 fell 21.2 percent.

Last month the median price paid for all new and resale Southland houses and condos sold was $270,000, down 1.8 percent from $275,000 in November and down 6.9 percent from $290,000 in December 2010. Last month’s $270,000 median matched January and October for the lowest level of 2011. The regional median has declined year-over-year for the past 10 months – since last March.

The Southland’s December median was 9.3 percent higher than the median’s low point in the current real estate cycle – $247,000 in April 2009 – but it was 46.5 percent lower than the peak $505,000 median in mid 2007. The peak-to-trough drop was due to a decline in home values and a shift in sales toward lower-cost homes, especially inland foreclosures.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 15.3 percent of last month’s purchase lending. That was up from 14.6 percent in November but down from 17.4 percent a year earlier. In the current housing cycle, jumbos fell in early 2009 to a low of 9.3 percent of the purchase loan market. Before the credit crunch hit in August 2007, jumbos accounted for about 40 percent of purchase loans.

In addition to the broader, years-old credit crunch, lower conforming loan limits that took effect on Oct. 1, 2011, impacted the housing market. Lawmakers have since restored the higher limits, which vary by county, for FHA loans but not for mortgages guaranteed by Fannie Mae and Freddie Mac.

Last month saw higher levels of lending in the affected loan ranges. For example, in Los Angeles and Orange counties, where the conforming loan limit was lowered from $729,750 to $625,500, the number of homes sold with purchase loans in that range totaled 104 in December, up 76.3 percent from November but still 73.2 percent lower than a year earlier. Prior to the change in conforming loan limits on Oct. 1, the combined two-county area saw an average of about 340 loans a month last year between $625,501 and $729,750.

It remains unclear whether, in the short run, the private mortgage market will begin to fill the void created by the lower conforming loan limits.

Last month 17.8 percent of all home sales were for $500,000 or more – the lowest portion since May 2009, when it was 17.4 percent. December’s share of $500,000-plus sales was down from 18.3 percent in November and down from 20.9 percent a year earlier. The low point for $500,000-plus sales in this cycle was in January 2009, when only 13.8 percent of sales crossed that price threshold. Over the past 10 years, a monthly average of 27.9 percent of homes sold for $500,000 or more.

In the lower price ranges, many first-time buyers and others continued to rely on government-insured FHA loans, which allow a relatively low down payment. FHA loans accounted for 30.6 percent of purchase mortgages in December, down from 32.0 percent in November and 33.5 percent a year earlier.

Absentee buyers, mainly investors and vacation-home buyers, purchased a record 26.4 percent of the Southland homes sold in December, paying a median $200,000. Last month’s absentee level matched the peak first reached in February 2011. The December absentee figure was up from 25.1 percent in November and up from 23.4 percent a year earlier. Since 2000, when this data series begins, absentee buyers have purchased a monthly average of 16.9 percent of all homes sold.

Paying a median $202,500, cash buyers purchased 29.0 percent of all Southland homes sold in December, down from 29.5 percent in November but up from 28.4 percent a year earlier. Cash purchases hit a high of 32.3 percent of sales last February, while the 10-year monthly average is 14.9 percent.

The typical monthly mortgage payment that Southland buyers committed themselves to paying last month was $1,026, which on an inflation-adjusted basis is a record low for any month back to January 1988. Last month’s figure was down from $1,049 in November and down from $1,205 in December 2010. Adjusted for inflation, current payments are 55.8 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 63.8 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last few years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.

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