E-mail Blast from ZipRealty

Sorry this is so long, but I feel like this e-mail I received from ZipRealty should be posted in its entirety (with some comments, naturally):

Orange County Housing Report: Demand Suddenly Surges

April 2, 2009

Coinciding with a drop in interest rates and a Wall Street rebound [wait, this is a "Wall Street rebound"?! How much is rent on your planet?], demand for Orange County housing increased by 22% in just two weeks. Demand, the number of new pending sales over the past month, increased from 2,670 pending sales two weeks ago to 3,247 today, a 577 home increase. Last year’s high of 3,060 pending sales was reached on June 12. Orange County demand has not reached this level since September 2005, the beginning of the current downturn [2005 was the start of the downturn? That's news to me]. Last year there were 962 fewer pending sales, totaling 2,285, and two years ago there were 1,114 fewer, totaling 2,133. The active listing inventory shed 580 homes in the past two week, a 5% decrease, totaling 11,026. The active listing inventory has not seen these lower levels since the beginning of April 2006. Last year there were 15,474 homes on the market, 4,448 additional homes compared to today. Two years ago there were 14,010 homes on the market, 2,894 additional homes. The expected market time dropped from 4.35 months two weeks ago to 3.4 months today. The expected market time last year was at 6.77 months, and two years ago it was at 6.57 months. This is the lowest expected market time since March 2006. The distressed homes inventory, foreclosures and short sales, dramatically changed over the past two weeks, dropping by 581 homes to 4,092. The height of the distressed inventory, 5,950, was achieved on August 7, 2008. There are 1,858 fewer distressed homes on the market compared to the height, a 31% drop. The distressed inventory now represents 37% of the current active inventory, dropping from 40% two weeks ago. Foreclosures now have an expected market time of 0.77 months, or three weeks. There are 170 fewer foreclosures on the market, totaling 731. Demand for foreclosures is at 953 pending sales. The foreclosure market is extremely hot. Buyers can expect to compete with multiple offers and sales prices above their list prices. The short sale inventory shed 391 homes in the past two weeks to 3,379 homes. The short sale inventory height, 4,701, was reached on August 7, 2008, coinciding with the total distressed inventory height. There are 1,322 fewer short sales on the market today. Demand for short sales increased by 205 pending sales, totaling 967. Since short sales are subject to lenders approval and are often not changed to pending status until lender approval is received, this may be a sign that lenders are gearing up to curb foreclosures through the accommodation of short sales [Ha! It may also be a sign that OJ Simpson will eat a burrito in jail tonight, but that doesn't make it even remotely true]. Total Orange County pending sales continues to reach record heights week after week. I started tracking the statistic back in September of 2006. After increasing by 355 homes over the past two weeks, the total pending count has reached 4,905 pending sales. Last year at this time, total pending sales totaled 2,852, 1,698 fewer than today. Two years ago it was at 3,047, 1,858 fewer. [They have these things on keyboards called "Enter" keys that allow you to start a new paragraph. Just sayin'.]

Word within the trenches is that there is tremendous activity out there in the lower ranges and with distressed properties. Many buyers first enter the market with anticipation that they are going to somehow be able to obtain a property for tens of thousands less than the asking price [because they "somehow" do, which, is why distressed sales are more than 50% of the market]. They are quickly learning that there is a lot of competition in the lower ranges and all distressed homes. There just is not enough news highlighting this aspect of the real estate market [Why does that matter?]. The activity in the lower ranges has reached such a high level, that it is starting to reflect in the median sales price for Orange County [Uh, no, it's higher-end homes, finally selling after being forced by distressed sales and limited financing options to dramatically lower their WTF prices, driving the median higher. You are implying that an increase in low-end sales, at ever-dropping prices, is somehow bringing the median sales priceup? Huh? Your transparent scare tactic to get people to "Buy Now!" is charming though], which posted its first month over month increase, from January to February 2009, in eight months. Lower interest rates, a lot of stimulus ["A lot of stimulus?" What exactly does that mean? Unless the government starts writing down payment checks, "stimulus" hasn't done shit. Especially regarding unemployment], the massive return of the first time home buyer, the return of investors, have all equated to a sharp uptick in the current Orange County real estate market ["BYE NOW OR B PRYCED OUT 4EVAR!1!"].

There is a major difference between the lower and upper ranges. For all home (sic) below $750,000, the expected market time has been dropped considerably. The best range in Orange County is homes between $250,000 and $500,000, with an expected market time of 2.09 months. 60% of the inventory within that range is either a short sale or foreclosure [Well, what a coincidence!]. The expected market time for homes below $250,000 is 2.46 months. For homes between $500,000 and $750,000, the expected market time is 3.46 months. It shoots up to a 6.4 month expected market time for homes between $750,000 and $1 million. From there, the expected market time blossoms to a stagnant market. The expected market time ranges from 13.11 month (sic), homes between $1 million and $1.5 million, and 43.44 months, homes above $4 million. What this helps illustrate is that the government’s focus on freeing up conventional financing, loans up to $729,750, is working within the real estate market. For jumbo financing, where loans are much more difficult to obtain and are at a higher rate, especially above $1 million, demand has just come to a crawl. With no focus from the government on higher ranges, it will not be until a bottom is reached in the lower ranges, which some are predicting during the second half of 2009 [By "some" I'm sure you mean, "A couple of chimps throwing feces at a calendar"], and confidence is restored in the financial markets, that decent demand will return to the upper ranges.