Nationwide mortgage delinquencies for the third quarter 2009 remain high according to figures published by Mortgage Bankers Association.  Overall mortgages in default or in the foreclosure process (i. e. notice of default or notice of sale) totaled 14%.  Prime mortgages were high as well at 10% while subprime mortgages were 42%.

Undoubtedly the high level defaults is the consequence of declining home values and joblessness.  Property values dived 40% or more since their 2006 peak, while the mortgages balances in some cases climbed.  An unemployment rate of 10% or higher does not account for the underemployed or those that have withdrawn from the job market.  So the actual unemployment picture is much worse.  Potentially compounding the situation are 2005 five year adjustable rate mortgages which will reset in 2010 and 2011.

There is reason for optimism however inasmuch as the overall economy is growing again and only 11,000 jobs were lost in November 2009 – a recession low.  More telling perhaps is the rate of temporary jobs which increased in November by 52,400.  Skittish employers may prefer temps to permanent employees until they have visibility of sustained growth prospects for their businesses.  Employment will be a key driver to an improved demand in the housing market.  

Nationwide homes are increasing as well as reflected in October 2009’s 6.2% increase in new home sales and existing homes sales increasing by 10.1%.  New homes turned in their best figure in over one year.  While existing home sales increased by the highest since 2007.

In the Santa Clarita Valley low prices and high affordability have created a high relative demand for homes   SCV’s unemployment picture at 7.9% (in November) is better overall than either the nation (10.2%), the state (12.0%), or LA County (12.7%).  Over 50% of the listings are short sales or bank owned homes keeping a lid on increasing prices.  These same low prices seem to have dissuaded non-distressed sellers – although they might have an ideal opportunity to move up.  Stores abound among REALTORS® regarding multiple offers.  Consequently our actively listed inventory remains relatively low at around 3 months. 

With politicians at the national level now focusing on job creation, I believe there may be reason to be guardedly bullish on housing at least in the short to intermediate term.

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