California housing market bounces back in February after slow start to year

Slowing home price appreciation and improving inventory combined to boost California’s housing market in February as existing home sales and median home prices increased from both the previous month and year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 368,160 units in February, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  Sales in February were up 4.7 percent from a revised 351,480 in January and up 2.4 percent from a revised 359,600 in February 2014.  The year-over-year increase was the largest observed since December 2012. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the February pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

“While February’s statewide improvement in the housing market was moderate, it’s an encouraging sign, nevertheless, as we head into the spring home-buying season,” said C.A.R. President Chris Kutzkey.  “On the supply side, housing inventory improved overall with active listings growing at a faster pace of 5.3 percent when compared to last February.  Regionally, both active listings in Southern California and Central Valley increased moderately from last year, while housing supply declined 10 percent in the Bay Area.”

The median price of an existing, single-family detached California home was essentially flat from January’s median price, inching up from $426,660 in January to $428,970 in February. February’s median price was 5.5 percent higher than the revised $406,460 recorded in February 2014.  While the statewide median home price is higher than a year ago, the rate of increase has narrowed significantly since early 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.

“The California housing market regained some traction in February as sales activity improved on a year-over-year basis for the second time in three months,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “At the state level, the market is moving in the right direction as the growth of sales continues its upward trend and home prices start stabilizing.  At the regional level, however, the San Francisco Bay Area continued to be hampered by constrained inventory and low housing affordability.”

Other key facts from C.A.R.’s February 2015 resale housing report include:

• The available supply of existing, single-family detached homes for sale statewide in February was unchanged from the 5 months reported in January. The index was 4.7 months in February 2014.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A six- to seven-month supply is considered typical in a normal market.

• The median number of days it took to sell a single-family home shortened in February, down from a 52.4 days in January to 47 days in February but up from 40.1 days in February 2014.

• According to C.A.R.’s newest housing market indicator measuring sales-to-list price ratio*, properties are again generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is keeping sales prices in line with original asking prices.  The statewide measure suggests that homes are selling at a median of 97.7 percent of the list price, down slightly from a ratio of 98.2 percent at the same time last year. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 104.2 percent.

• The average California price per square foot** for an existing single-family home was $210 in February 2015, an increase of 2.5 percent from the previous month and a 4.1 percent increase from February 2014.  Price per square foot at the state level has been showing an upward trend since early 2012, and has been rising on a year-over-year basis for 37 consecutive months.  In recent months, however, the growth rate in price per square foot has slowed down significantly as home prices leveled off.  San Francisco County had the highest price per square foot in February at $754/sq. ft., followed by San Mateo ($689/sq. ft.), and Santa Clara ($552/sq. ft.).  The three counties with the lowest price per square foot in February were Siskiyou ($102/sq. ft.), Tehama ($107/sq. ft.), and Madera ($110/sq. ft.).

• Mortgage rates edged up in February, with the 30-year, fixed-mortgage interest rate averaging 3.71 

percent, up from 3.67 percent in January but down from 4.3 percent in February 2014, according to Freddie Mac.  Adjustable-mortgage interest rates also rose in February, averaging 2.43 percent, up from 2.38 percent in January but down from 2.54 percent in February 2014.

Graphics (click links to open):

• February sales at-a-glance infographic.
• Unsold Inventory by price range.
• Year-over-year 6-month moving sales average.
• Share of sales by price range.
• Sales to list ratio.
• Price per square foot.

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only.  County sales data are not adjusted to account for seasonal factors that can influence home sales.  Movements in sales prices should not be interpreted as changes in the cost of a standard home.  The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold.  Due to the low sales volume in some areas, median price changes in February exhibit unusual fluctuation. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions.  The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage.  A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.   

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property.  It is calculated as the sale price of the home divided by the number of finished square feet.  C.A.R. currently tracks price-per-square foot statistics for 33 counties.  

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

February 2015 County Sales and Price Activity (Regional and condo sales data not seasonally adjusted)

February-15	Median Sold Price of Existing Single-Family Homes							Sales
State/Region/County	Feb-15	Jan-15		Feb-14		MTM% Chg	YTY% Chg	MTM% Chg	YTY% Chg
CA SFH (SAAR)	$428,970	$426,660	r	$406,460	r	0.5%	5.5%	4.7%	2.4%
CA Condo/Townhomes	$367,180	$352,590	r	$345,250	r	4.1%	6.4%	3.7%	-7.4%
Los Angeles Metropolitan Area	$409,810	$395,200		$383,080		3.7%	7.0%	1.3%	-1.9%
Inland Empire	$282,400	$267,070		$260,360	r	5.7%	8.5%	-0.6%	-5.2%
S.F. Bay Area	$740,270	$668,520	r	$673,410	r	10.7%	9.9%	11.6%	-4.5%
S.F. Bay Area
Alameda	$697,160	$640,330		$627,550		8.9%	11.1%	2.1%	-8.6%
Contra-Costa (Central County)	$738,090	$723,960		$629,570		2.0%	17.2%	7.4%	-13.4%
Marin	$1,023,440	$982,140		$983,690	r	4.2%	4.0%	25.9%	-8.5%
Napa	$544,120	$400,000		$466,670		36.0%	16.6%	6.1%	6.1%
San Francisco	$1,154,760	$986,610	r	$1,062,500	r	17.0%	8.7%	28.4%	-22.3%
San Mateo	$1,200,000	$1,012,500		$970,000	r	18.5%	23.7%	23.3%	-3.2%
Santa Clara	$915,130	$815,000		$805,000	r	12.3%	13.7%	13.0%	0.9%
Solano	$337,500	$326,510		$288,300		3.4%	17.1%	8.3%	17.7%
Sonoma	$489,330	$468,180		$467,860		4.5%	4.6%	8.9%	-10.1%
Southern California
Los Angeles	$419,260	$441,610		$389,080		-5.1%	7.8%	-0.3%	-3.2%
Orange County	$680,290	$674,340		$677,700		0.9%	0.4%	10.9%	6.3%
Riverside County	$323,220	$306,060		$302,370		5.6%	6.9%	4.3%	-7.7%
San Bernardino	$213,930	$206,660		$186,440	r	3.5%	14.7%	-7.8%	-0.6%
San Diego	$499,000	$496,380		$476,780		0.5%	4.7%	14.8%	5.7%
Ventura	$568,840	$582,630		$558,490		-2.4%	1.9%	-1.7%	6.4%
Central Coast
Monterey	$500,000	$420,000		$500,000		19.0%	0.0%	-7.7%	6.2%
San Luis Obispo	$491,670	$478,720		$480,680		2.7%	2.3%	-5.2%	6.4%
Santa Barbara	$556,820	$690,220		$661,760		-19.3%	-15.9%	5.7%	12.1%
Santa Cruz	$675,000	$665,000		$600,000		1.5%	12.5%	15.8%	0.9%
Central Valley
Fresno	$210,320	$211,470		$182,270		-0.5%	15.4%	10.0%	5.8%
Glenn	$220,000	$162,500		$200,000		35.4%	10.0%	-33.3%	75.0%
Kern (Bakersfield)	$215,000	$195,000	r	$195,000		10.3%	10.3%	-6.9%	-10.2%
Kings County	$196,000	$172,500		$182,500		13.6%	7.4%	4.5%	-19.3%
Madera	$217,500	$245,000		$172,860	r	-11.2%	25.8%	-21.6%	-43.1%
Merced	$168,750	$168,750		$181,670		0.0%	-7.1%	31.7%	10.7%
Placer County	$375,380	$375,980		$370,090		-0.2%	1.4%	16.6%	9.1%
Sacramento	$283,960	$256,670		$260,330		10.6%	9.1%	19.6%	11.5%
San Benito	$450,000	$435,000		$399,000		3.4%	12.8%	22.9%	10.3%
San Joaquin	$270,750	$263,360		$234,930		2.8%	15.2%	7.4%	-1.8%
Stanislaus	$237,680	$230,790		$215,380		3.0%	10.4%	-4.0%	-2.5%
Tulare	$172,140	$173,330		$163,330		-0.7%	5.4%	23.4%	15.9%
Other Counties in California
Amador	$271,430	$210,710		$206,250		28.8%	31.6%	30.4%	-18.9%
Butte County	$247,320	$231,730		$217,650	r	6.7%	13.6%	10.8%	33.7%
Calaveras	$232,500	$223,000		$225,500		4.3%	3.1%	1.8%	-5.1%
Del Norte	$189,000	$152,260		$220,000		24.1%	-14.1%	-33.3%	71.4%
El Dorado County	$384,880	$375,000		$332,050		2.6%	15.9%	19.1%	16.1%
Humboldt	$250,000	$263,890		$218,750		-5.3%	14.3%	31.3%	55.6%
Lake County	$184,290	$163,330		$170,000		12.8%	8.4%	-6.3%	-18.2%
Mariposa	$250,000	$268,750		$225,000		-7.0%	11.1%	-11.1%	-33.3%
Mendocino	$309,090	$258,330		$272,220		19.6%	13.5%	17.2%	6.3%
Nevada	$334,000	$340,000		$305,000		-1.8%	9.5%	-13.7%	16.7%
Plumas	$192,500	$276,000		$118,000		-30.3%	63.1%	100.0%	81.8%
Shasta	$225,860	$216,130		$186,000		4.5%	21.4%	-2.9%	-3.6%
Siskiyou County	$148,330	$195,000		$130,000		-23.9%	14.1%	-16.0%	16.7%
Sutter	$213,330	$227,080		$188,000		-6.1%	13.5%	9.4%	7.4%
Tehama	$150,000	$162,860		$237,500		-7.9%	-36.8%	-36.7%	26.7%
Tuolumne	$195,000	$236,360		$222,730		-17.5%	-12.5%	0.0%	0.0%
Yolo	$372,860	$307,500		$333,330		21.3%	11.9%	39.4%	17.9%
Yuba	$215,220	$204,170		$200,000	r	5.4%	7.6%	27.3%	55.6%

r = revised

February 2015 County Unsold Inventory and Time on Market
(Regional and condo sales data not seasonally adjusted)

February-15	Unsold Inventory Index					Median Time on Market
State/Region/County	Feb-15	Jan-15		Feb-14		Feb-15	Jan-15		Feb-14
CA SFH (SAAR)	5.0	5.0		4.7		47.0	52.4		40.1
CA Condo/Townhomes	4.3	4.3		3.9		43.2	52.4	r	40.0	r
Los Angeles Metropolitan Area	5.8	5.5		5.0		58.7	63.0		48.0
Inland Empire	6.7	6.4		5.4	r	67.6	67.5		48.0
S.F. Bay Area	3.2	3.1		3.3	r	37.7	48.6		36.4	r
S.F. Bay Area
Alameda	2.8	2.6		3.1		48.8	56.1		48.7
Contra-Costa (Central County)	3.3	2.8		3.0		53.3	68.1		49.2
Marin	3.9	4.0		4.1		39.4	51.9		29.8
Napa	5.6	5.4		5.9		87.9	73.1		51.5
San Francisco	2.5	2.6	r	4.2	r	20.7	29.1	r	25.5	r
San Mateo	2.8	2.5		2.9		19.1	22.5		20.8
Santa Clara	2.6	2.3		2.5		21.3	25.4		19.8
Solano	4.2	4.2		3.5		47.8	50.5		37.7
Sonoma	4.1	3.9		3.8		52.1	63.8		50.6
Southern California
Los Angeles	5.2	4.9		4.6		51.1	54.8		43.6
Orange County	5.1	5.1		5.1		65.1	71.9		56.6
Riverside County	7.0	7.1		5.6		72.3	70.0		49.0
San Bernardino	6.2	5.4		5.0		58.1	63.5		45.8	r
San Diego	4.6	5.0		5.0		28.6	35.0		29.9
Ventura	5.8	5.2		5.2		66.5	72.6		58.3
Central Coast
Monterey	5.3	4.7		5.5		34.2	42.0		40.2
San Luis Obispo	5.6	5.0		5.9		39.9	37.9		47.2
Santa Barbara	5.8	5.4		6.3		46.6	54.9		28.1	r
Santa Cruz	3.5	3.9		3.7		28.5	46.0		49.9
Central Valley
Fresno	5.7	6.1		5.8		34.5	42.4		31.8
Glenn	4.0	2.7		9.5		70.7	82.8		98.3
Kern (Bakersfield)	5.0	4.5	r	3.7	r	33.0	37.0		30.0	r
Kings County	6.8	6.6		4.3		51.3	50.3		54.4
Madera	12.9	9.5		2.5		94.6	58.2		58.6	r
Merced	4.9	6.6		4.6		58.7	48.6		29.6
Placer County	4.5	4.7		4.2		39.5	42.7		26.5
Sacramento	3.4	3.9		3.8		27.8	34.2		25.7
San Benito	2.9	3.8		3.3		41.0	52.2		41.9
San Joaquin	4.4	4.6		3.8		35.5	39.3		25.4
Stanislaus	4.5	4.1		3.9		29.8	32.9		26.1
Tulare	5.4	6.3		5.9		49.5	49.7		40.4
Other Counties in California
Amador	6.4	7.4		4.7		110.3	115.2		36.8
Butte County	4.4	4.7		6.4	r	55.2	50.5		49.6	r
Calaveras	8.6	8.4		7.2		93.0	47.0		75.0	r
Del Norte	12.2	8.4		20.9		127.0	160.0		159.0	r
El Dorado County	5.5	6.0		6.1		62.7	79.9		46.4
Humboldt	5.9	7.5		9.3		77.1	56.8		52.8
Lake County	8.2	6.9		6.5		109.6	103.4		84.0	r
Mariposa	13.5	12.0		3.7		135.5	68.3		105.5
Mendocino	8.9	10.2		9.0		100.7	123.7		70.7
Nevada	7.3	6.0		7.7		52.0	60.0		46.5
Plumas	14.0	25.3		24.1		192.5	155.0		106.0
Shasta	7.9	7.4		7.1		64.2	71.2		55.2
Siskiyou County	15.2	12.8		16.7		56.4	122.1		110.3
Sutter	4.3	4.4		3.6	r	49.5	78.7		25.5	r
Tehama	10.0	5.7		12.9		45.5	53.8		70.7
Tuolumne	6.7	7.2		7.8		57.1	50.3		86.4
Yolo	3.4	4.3		4.2		29.1	45.5		28.1
Yuba	3.7	4.9		6.0	r	29.0	37.2		38.3	r

r = revised

March 2015 National Housing Trends Newsletter

Angela Yglesias

Levesque Realty 

Cell: 805-490-4944   
Phone: 805-490-4944 

Housing Trends March 2015 View archives

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National market update

Existing-Home Sales Slightly Improve in February, Price Growth Gains Steam

WASHINGTON (March 23, 2015) – Existing-home sales increased modestly in February, but constrained inventory levels pushed price growth to its fastest pace in a year, according to the National Association of Realtors®.

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5 Spring Home Buying Strategies

The spring home-buying boom is underway, and this year buyers in some markets will face an increased amount of competition due to low housing inventory. In fact, the most recent existing-home sales report from the National Association of REALTORS® cautions that "Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices."

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National housing indicators

Existing home sales (March)

4.88 millions units*

Existing home median price (March)

$202,600

Housing Starts (March)

8.97 millions units*

New home sales (March)

4.81 millions units*

*Seasonally adjusted annual rate. Source: NATIONAL ASSOCIATION OF REALTORS®.

National economic indicators

Home ownership

4th Qtr 2014

+64.0%

4th Qtr 2013

+65.2%

The homeownership rate in the fourth quarter 2014 was 64.0 percent, down 1.2 (+/- 0.4) percentage points from the fourth quarter 2013 rate of 65.2 percent. The homeownership rates in the Northeast, Midwest and South were lower than the rates in the fourth quarter 2013, while the rate in the West was not statistically different from the rate a year ago.

New home sales

February 2015

+7.8*%

January 2015

+4.4*%

Sales of new single-family houses in February 2015 were at a seasonally adjusted annual rate of 539,000. This is 7.8 percent (+/- 15.2%)* above the revised January 2015 estimate of 500,000.

Source: U.S. CENSUS BUREAU

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Source: NATIONAL ASSOCIATION OF REALTORS®.

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Conejo Valley Homes For Sale

Our brokerage has several residential home buyers looking in and around the Conejo Valley.  If you or anyone you know is thinking about selling your home, please contact Angela Yglesias via email:  yglesias75@gmail.com and/or cell: 805.490.4944.  A free home estimate and comp analysis of your property is available to you anytime.  We currently have residential home buyer clients looking in Newbury Park, Thousand Oaks, Westlake Village, Agoura Hills, Lake Sherwood, Hidden Valley, Simi Valley, Santa Rosa Valley, Calabasas and Malibu.  Let Angela show them your property today.

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Why Home Owners Need to Get Moving

An article in CNNMoney recently highlighted several reasons why this spring would be the perfect time for home owners to get off the fence.  After all, many markets across the country are still tilting in sellers’ favor. Here’s why:

A Sellers' Opportunity

Home Prices Surge to Fastest Pace in Year

Tight Supplies Put Home Prices on the Move

• Less competition: A limited number of homes on the market will help sellers nab top dollar, and may even spur bidding wars and multiple offers. The National Association of REALTORS® reports that inventory levels nationwide were at a 4.6-month supply in February. A balanced market is considered to fall between a five- to seven-month supply.
• Mortgage rate hikes loom: Mortgage rates are still sitting near historical lows, with the 30-year fixed-rate mortgage hovering under 4 percent. The low rates have helped push more buyers into the marketplace, but they could also be a good thing for sellers who are looking to rebuy. However, rates aren’t expected to remain this low for too much longer, which may prompt a rush this spring. "When interest rates are thought to be escalating, we see a wave up activity with people getting off the sidelines," says Budge Huskey, president and CEO of Coldwell Banker Real Estate.
• Soaring rental costs: Also spurring more potential home buyers off the sidelines: Rising rental costs. Rental prices have increased 15 percent nationwide in the past five years in 70 metro areas across the U.S., according to NAR research. "Every time there's an increase, it triggers the decision processes on whether [renters] should go into the market and buy," Huskey told CNNMoney. "It allows others to move up the chain in the market."

Source: “4 Reasons to Sell Your Home Now,” CNNMoney (March 25, 2015)

Tips for Increasing a Home's Property Value

Today is officially the first day of spring and selling season is already in full swing.  If you are planning to sell your home, you may want to consider making changes to improve its comfort level and the way it functions to make it more appealing to potential buyers.

Where should you begin? With the four home improvement basics: foundation, roof, plumbing, and electrical.  Of these the roof is the most important.  I am almost always asked “How old is the roof?”.  And keeping the roof in good shape alleviates other problems; for example, water can run laterally and once a leak starts it can follow plumbing and even electrical conduits. So what you think is a plumbing leak might really be a hole in the roof.

Here are some suggestions to help with your planning:

·   Repair: First take a good look at the state of the home, inside and out. Fix the obvious areas that need maintenance.

·    De-clutter: Find ways to store odds-and-ends in containers and cabinets or donate belongings to charity.

·    Lighten up: Brighter, light-filled rooms are more appealing and make a house feel more spacious. Consider replacing heavy drapes with shutters, shades, or blinds.

·   Add eco value: Replace old windows with energy-efficient versions to reduce home energy costs and add value.

·   Update: Water heaters, furnaces, and toilets are also good to update for energy and water conservation but probably will not add significantly to the home's value.

·   Refinish: If wood floors are looking tired, refinish them. Replace worn carpeting where possible.

·   Kitchen clean-up: The kitchen is an obvious focal point for buyers. Consider a light upgrade in the kitchen, by replacing the sink or replacing cabinets. If you are planning to replace counters try solid surface quartz-based materials, which have become the popular alternative to granite.

·   Better bathrooms: Bathrooms are typically less expensive to remodel than kitchens so there is more potential for a return on the investment. Buyers frequently request double vanities and a walk-in shower so consider upgrading accordingly.

·   Remodel: It is usually more cost-effective to remodel attics and basements than to add entirely new rooms.

·  Spruce up: Add curb appeal by weeding and sprucing up the garden with low maintenance, drought-tolerant plantings -- also called xeriscaping. Giving the front door a new coat of paint is a low cost way to add curb appeal.

Please feel free to contact me if you would like a free estimated value assessment of your property.

‘Green’ Is Important for Buyers

DAILY REAL ESTATE NEWS | TUESDAY, MARCH 17, 2015

Green may be a popular color on St. Patrick’s Day, but decor and costumes aren't the only places we've been seeing the trend pop up. More home buyers are adding green home features to their wish list, according to the National Association of REALTORS®' 2014 Profile of Home Buyers and Sellers and the 2015 Home Buyer and Seller Generational Trends reports.

Read more: Do Green Homes Fetch Higher Sales Prices?

Here's a look at the environmentally friendly home features that buyers rated as "very important" or "somewhat important" in their house hunting search:

• Heating and cooling costs: 86%
• Energy efficient appliances: 68%
• Energy efficient lighting: 66%
• Landscaping for energy conservation: 46%
• Environmentally friendly community features: 47%
• Solar panels installed on a home: 11%

Source:"St. Patrick’s Day: Green and Energy Efficient Home Features," National Association of REALTORS® Economists' Outlook blog (March 16, 2015)

Simon's Hostile Bid for Macerich Signals a New Round of Regional Mall Buys

Here is what happened the last time a major player entered the mall sales arena. In 2012, Simon Property Group went on a major acquisition run, triggering a flurry of sale transactions. The volume of regional mall sales tripled and property values for regional shopping malls shot up more than 50% that year as other major institutional investors followed their lead. 

Now Simon is off and running again, and so are regional mall sales and values. 

This week, Simon Property Group (NYSE:SPG) took the next step in its pursuit of The Macerich Co. (NYSE:MAC), going public with an unsolicited proposal to acquire all of Macerich's outstanding stock for $91 per share, about $16 billion in total stock value. 

The total value of the proposed transaction is $22.4 billion, once the assumption of Macerich's $6.4 billion of outstanding debt is factored in. 

In 2010 and 2011, major mall sale volumes tallied less than $2 billion per year. Buyers paid less than $150/square foot in 2010 and about $175 in 2011. Mall sales remained muted as investors warily gauged consumer spending and the impact of online retail sales on malls. 

Following the recession, the mall market divided between the haves and the have-nots, as top-tier properties continued to attract shoppers in droves while older, lower-quality malls suffered further declines in sales. 

Simon signalled a new round of mall sales activity in the first quarter of 2012 when it cut a deal to buy out joint venture partner Farallon Capital’s stake in 26 Mills malls for $1.5 billion. Other major buyers followed suit: General Growth Properties, WP Glimcher, Starwood Capital, Macerich and international capital made deals as well as total mall sales that year reached $5.9 billion and the average sale price shot up to about $266 per square foot. 

Now, those same buyers are showing up this go-around as well. 

Simon signaled its intent to go after Macerich last November when it disclosed the acquisition of a 3.6% stake in its rival mall owner, equivalent to 5.71 million shares, kicking off a new round of competition amoong the top mall owners for market share. 

"While Simon continues to focus on the redevelopment and expansion of its current portfolio, as well as the development of new premium outlet centers, it also seems to be more willing to undertake acquisitions of stabilized high-producing malls," Nomura Securities noted in a March 5th report. "The firm has recently completed the purchase of Jersey Gardens (to be renamed The Mills at Jersey Gardens) and University Park Village as part of WPG's acquisition of Glimcher. It also recently announced a joint venture with Hudson Bay to acquire 42 anchor boxes." 

As part of its strategy to acquire Macerich, Simon said it has an agreement in principal to sell selected Macerich malls to General Growth Properties, the second-largest mall owner after Simon, should a deal for Macerich materialize. Analysts said the side deal with GGP appears to offer Simon several benefits. Any sales to GGP raise money to fund the acquisition, also they would help appease any potential anti-trust concerns from regulators, while also keeping a potential rival bidder at bay. 

GGP, for its part, also appears to be preparing for this outcome, raising a substantial sum from its recently announced sale of a 25% stake in its Ala Moana retail and office complex in Honolulu, HI, to an Australian pension fund in a transaction that values the center at a $5.5 billion. 

In addition, GGP reported that it may sell an additional 12.5% equity interest in the trophy asset within the next 60 days, which would result in a gain of approximately $485 million that GGP said it plans to use to fund "a pending acquisition." 

Macerich has been doing some shopping of its own, consolidating its ownership in several of its mall properties. In November 2014, the company bought out its joint venture partner's 49% interest in Queens Center, Washington Square, Los Cerritos Center, Stonewood Center and Lakewood Center from a wholly-owned subsidiary of the Ontario Teachers' Pension Plan Board for $1.8 billion, including the assumption of $672 million of property-level debt. 

Also in November 2014, Macerich bought out joint venture partner AWE Talisman's 40% interest in Fashion Outlets of Chicago for $70 million to own the recently-developed, 529,000-square-foot center outright. 

The market posted $2.2 billion in regional mall sales in 2014 with more than half of that ($1.4 billion) occurring in the fourth quarter. So far this quarter, buyers have rung up $1.9 billion in regional mall sales. 

In the second quarter of 2014, when several lower-quality malls changed hands, the average sale price for malls was $134 per square foot. So far in 2015, with investment activity shifting to top tier malls, sale prices have jumped to a range of $200 perr square foot to almost $480 per square foot. 

All Eyes on Trophy Assets

The crown jewel in the Macerich portfolio is considered to be Tysons Corner Center, a 2.1 million-square-foot super regional mall in the northern Virginia suburbs outside Washington, DC. A major expansion is underway that will add a 30-story, 430-unit apartment tower and a 300-room Hyatt Regency hotel expected to reach completion in the first half of 2015. The new multifamily and hotel components are in addition to the 527,000-square-foot office tower which opened in August 2014 with major tenants Intelsat and Deloitte. 

Fairfax County, Virginia assesses the value of the Tysons Corner Center at $1.55 billion. 

“When you are best-in-class and innovative, there will always be a demand for your assets or portfolio. Simon’s desire to spend $22 billion to acquire Macerich is a case in point,” said Soozan Baxter a Manhattan-based retail leasing services consultant to landlords. “Tysons Corner, which I have been visiting my entire life, has transformed over the years. Taking out the JC Penney box a decade ago and re-tenanting it with restaurants, constantly upgrading the mix, and going head-to-head against Tyson’s Galleria, is yet another example of Macerich pushing the envelope. I think their properties will meld well with some of Simon’s trophy centers.” 

And it is the trophy assets that mall buyers are after right now. 

According to Nomura Securities, mall REITs continued to respond to a shift in consumer shopping patterns by repositioning assets and disposing on non-core properties last year. Since the second quarter 2014 earnings season, Mall REITs have shed 26 assets. 

“In the year ahead, we expect to see most of the REITs continuing to shed underperforming assets and further consolidation is possible,” Nomura analysts noted as a majority of REITs continue to emphasize ‘capital recycling’ in their messages to investors, selling underperforming assets and re-investing in higher quality centers with growth potential. 

“While the mall REITs that own higher productivity assets appear to have largely completed pruning their portfolios and are becoming more acquisitive, we expect to see continued dispositions in the year ahead,” Nomura noted. “Many of the REITs have identified a set of non-core assets that are likely to be sold or disposed of over the next year. By and large, it appears that the buyers of weaker malls are private or regional operators.” 

Last quarter, for example, Taubman Centers sold seven malls to Starwood Capital Group as part of its ongoing strategy to recycle capital. Starwood paid $1.403 billion for the portfolio. Taubman received net cash proceeds of $716 million, a portion of which it set aside to fund a tax deferred like-kind exchange under Section 1031 of the Internal Revenue Code. 

Macerich, however, does not appear to be a willing seller of its portfolio or trophy assets. The company said it would review Simon’s proposal with its financial and legal advisors and advised its stockholders not to take any action at this time. 

With few individual trophy assets coming to market, a rejection may not deter Simon. The dearth of available top quality malls was cited by Taubman following its recent sale to Starwood, when it announced after the sale that it couldn’t find suitable properties for an exchange that could meet its timing and investment requirements. The company opted instead to essentially invest in its own portfolio. This week the REIT increased its share buyback program by $250 million. 

Simon Property Group's pursuit of The Macerich Co. makes sense, analysts at Citi Research said, and they expect Simon's current offer of $91 per share may not be its last. 

"The price will likely have to move higher to consummate a deal, but given the low yield it gets increasingly tougher to argue deal accretion," Citi said.

Copyright © 2015 CoStar News

Mar 10, 2015 - CoStar News

Servicers Completed Mortgage Solutions for 1.88 Million Homeowners in 2014, Report Shows

Approximately 1.88 million homeowners nationwide received a mortgage solution or foreclosure alternative in the form of a loan modification, short sale, deed-in-lieu of foreclosure, or other workout plan during 2014, according to data released Wednesday by HOPE NOW.

The 2014 numbers brought the total number of solutions the industry has offered to homeowners since 2007, when HOPE NOW began tracking the data, up to 23.2 million, representing a combination of both long and short term tools.

The total number of permanent loan modifications offered to homeowners by the industry in 2014 was 489,000, according to HOPE NOW. Of those, 352,000 were completed under proprietary programs and approximately 137,000 were completed under the U.S. Department of Treasury's Home Affordable Modification Program (HAMP). The number of permanent loan mods completed since 2007 now totals more than 7.3 million, with approximately 5.9 million coming via proprietary programs and about 1.45 million coming under HAMP, according to HOPE NOW.

Meanwhile, both foreclosure starts and completed foreclosures experienced significant declines in 2014 compared to 2013. In 2014, the foreclosure process was started on approximately 842,000 residential homes nationwide compared to 1.28 million in 2013, which is a decline of 34 percent. Completed foreclosures, which are a true indicator of the number of homes lost to foreclosure, declined by 27 percent – from 627,000 in 2013 down to 455,000 in 2014. The number of mortgage loans that were 60 days or more delinquent as of December 31, 2014, declined by about 5 percent from the same period a year earlier – from 2.03 million down to 1.92 million, according to HOPE NOW.

"The 2014 foreclosure data shows a continuing trend of recovery in the housing market," said Eric Selk, director of HOPE NOW. "While loan modifications continue to fall from their peak levels around 2010, delinquencies and foreclosures are showing the corresponding decline. Nearly half a million families were helped with loan modifications in 2014. This is a significant number and shows the strong commitment from HOPE NOW members. The industry has a multitude of solutions at their disposal, both long term and short term, and mortgage services work hard to put homeowners in solutions that are sustainable and realistic."

Short sales completed in 2014 totaled 130,000, bringing the total completed since December 2009, when HOPE NOW began tracking short sales data, up to 1.57 million. Deeds-in-lieu of foreclosures totaled 28,000 in 2014, bringing the total since December 2009 up to 127,000.

Author: Brian Honea  DSnews: http://dsnews.com/news/03-04-2015/servicers-completed-mortgage-solutions-1-88-million-homeowners-2014-report-shows