Riverside County California Shows an Uptick in Home Prices

Is this noise or have we reached a bottom in price declines? One month of price increases is encouraging.







Sales data for Riverside County, CA show the first monthly increase in the median home sale price. The median price of homes sold in October was $245,000. This represents a $5,000 increase in the median home sale price over September which was $240,000. Home prices have been declining steadily in Riverside County. The peak median home sale price in Riverside was $427,000 back in August 2006.

Bakersfield, CA Losing Value Fast

In Bakersfield, CA new homeowners are losing value fast. Those who have bought in 2008, over one-third already have negative equity. Negative equity statistics like this will contribute further to the current foreclosure mess. Below is a chart that shows the median home price trend in Bakersfield for the last few years.


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Is The LA Market Now Affordable?

Is the Los Angeles Metro market ready to bounce back? Maybe not, but the average purchase mortgage has decreased to a relatively affordable level. The chart below shows the monthly decrease in the Average Purchase Mortgage from January 2007 through September 2008.


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Wells Fargo Leads in VA Mortgage Sales in Riverside, CA

Wells Fargo Mortgage leads in sales of VA guaranteed mortgages in Riverside County, California. In Riverside County, their are roughly 30 new conventional mortgages and 5 new FHA mortgages for every new VA mortgage. VA mortgage products and FHA mortgage products are gaining sales rapidly while conventional mortgage sales have been declining. The rapid rise of VA mortgages justifies tracking the leaders in sales of these products.

Bank of America Dominates Riverside Conventional Mortgage Market

Bank of America along with their recent acquisition Countrywide, have a combined market share exceeding 23 percent in Riverside County, California. For conventional mortgages the number of new originations during 2008 has been declining for all lenders in Riverside including Bank of America.. Even with the steady decline in new conventional originations, Bank of America and Countrywide combined have grown their market share during the year making them a dominant force in the market. Bank of America combined with Countrywide has also grown their number of mortgages and market share with FHA mortgages.

Riverside County Leading Cities

Riverside County, California has seen tremendous growth in FHA originations as many areas of the country this year. The chart below shows the monthly FHA originations from January through August 2008.

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A more interesting question is where is this growth taking place within the county? We have a report that shows the "Leading Cities Within A County". Here is a report for Riverside County.

If you are interested in seeing a similar report for other counties, contact MortgageDataWeb.

Which Los Angeles Communities are most impacted by FHA mortgages?

The leading cities within Los Angeles county with the most new FHA mortgages are Lancaster and Palmdale. The chart shows the top five cities in Los Angeles county with the most FHA mortgages in 2008 (year to date).

Beverly Hills has some FHA mortgages. Not enough in Beverly Hills to make the top five. Do you think FHA mortgages will finance large portions of real estate in towns like Beverly Hills, Malibu, or Pacific Palisades? We see these FHA products financing a home near you!

Impact of Economic Stimulus on Mortgage Finance in Los Angeles

The chart shows the recent growth of FHA mortgages in Los Angeles. We expect this growth to accelerate exponentially.

Early this year, the Economic Stimulus Act of 2008 (Public Law 110-185) included an increase of FHA and conventional mortgage loan limits. For Los Angeles, the new mortgage loan limit is $729,750. Before the Economic Stimulus Act the maximum FHA mortgage amount for single family homes was $362,790. That prior mortgage loan limit made FHA mortgages useless for home purchases in Los Angeles because the purchase price for most homes were substantially greater than the FHA mortgage limit. Higher mortgage loan limits and lower home purchase prices make many more homes eligible for FHA mortgages for borrowers with low down payments. Home purchases using conventional mortgages will not be as easy or cost effective for many borrowers. While conventional mortgage financing in Los Angeles is still many times greater than FHA, conventional mortgage originations are declining.

The newer housing legislation maintains the high FHA mortgage limits. Homeowners can refinance their recent "under water" conventional mortgages into FHA mortgages with a principle balance reduced to 85% of the current market value of the home and approval from their lender to release the remaining loan obligation from the borrower. More mortgage investors are accepting reduced principle as payment in full when closing short sales. Reduced principle payoffs are expected to increase in mortgage refinances adjusted to current market value of the property.

Mortgage lenders serving borrowers in Los Angeles with FHA mortgages stand ready to profit from accelerating volumes of FHA mortgage transactions. The mortgage market share report for Los Angeles covering the past two months shows some lenders we spoken about recently. Several prominent mortgage lenders have stopped originating new mortgages. First Horizon sold their mortgage operations to Metlife Bank. Prospect Mortgage. shown in the report as Metrocities, has been gaining market share in Los Angeles, especially with FHA mortgages. Prospect Mortgage recently purchased retail offices of Indymac. Prospect Mortgage may also pick up the wholesale customers of Indymac. This will propel Prospect (Metrocities) to the top of the market. In Los Angeles, Metrocities shows strong market share with conventional mortgages (Let us know if you want these market share reports).

Another mortgage lender expected to show market leadership in Los Angeles is TB&W Mortgage. They recently acquired Platinum Home Mortgage. The combined company and business relationships that TB&W has with brokers should make TB&W a formidable competitor in this market.

Any mortgage company that expects to successfully compete for business in Los Angeles must know the conventional mortgage products, Government insured mortgage products, pricing, and the business relationships that companies like TB&W and Prospect/Metrocities has established in Los Angeles. What else do you need to know about the largest mortgage market in the nation? We might have the data for you to evaluate your decision to participate Los Angeles and how to succeed. Over the next few days and weeks, I'll be publishing more reports, charts, and maps showing the mortgage market landscape in Los Angeles. Knowing this market information gives mortgage professionals the edge needed to succeed!

Million $Jumbos Declining in Marin County, California

Calculated Risk reported on cracks in the high end real estate markets in the San Fransisco Bay area. The impacts that this has on the million dollar jumbo mortgages is clearly shown in the mortgage market share reports for Marin County, California for 2008, and for 2007. Purchase mortgage originations having mortgage loan amounts over 1 million dollars have declined this year to almost half of the rate that the same mortgages had in the prior year in Marin County.

Notice that the 2007 market leader, Washington Mutual (Wamu), has fallen off the chart. Wamu used to lead most markets in California with their super million dollar jumbo mortgage product. They used to lead with a lot of other mortgage products but no more! Do you think Wamu will make a comeback?

Mortgages in Beverly Hills

Are we supposed to feel better by learning about mortgage default and foreclosures impacting wealthy or famous people living in the most expensive communities?

CNN reports on foreclosures in communities such as Beverly Hills and other multi million dollar communities. Is this a case where the homeowners financed their homes with mortgages from those evil predatory lenders or might the decline in real estate values make it a smart business decision to walk away from mortgage debt?

Look at the lenders who originated the mortgages on Beverly Hills' homes. You normally do not associate them with predatory nor subprime lenders. By the way, I peaked at the rate spread values in 2006 HMDA data for Beverly Hills. 1,233 out of 1,368 mortgages were low cost (rate spreads < 3%).

FHA Loans Rising In Silicon Valley

The Mecury News reports that a "nearly extinct" mortgage loan is now reappearing in the Silicon Valley - the FHA loan. For many years, the FHA loan limit was too low for many buyers to use in high-cost real estate areas such as the San Francisco Bay Area. The passage of the economic stimulus package by Congress in February raised the FHA loan limit in the San Francisco Metro Area to $729,750. As a result, it has become an excellent option for many home buyers.

Lenders and brokers are reporting both an increase in applications for purchase loans as well as refinancing from more expensive adjustable rate products.

The number of FHA loans in the San Francisco Metro Area during January through April 2008 has increased to a total of 112 mortgages from a total of just 13 mortgages during the same months in 2007.