The real estate market continues stabilize in many communities and that improvement is creating different opportunities to impact the real estate business and support neighborhoods today. Due to the evolution in our company's core business strategy, New Vista is no longer taking applications from REO listing agents for our vendor network and will not be assigning new REO properties. The management team appreciates your continued interest in working with New Vista and will provide an update in the future as we create new opportunities for the diverse real estate market.
REO SALES DRIVE DOWN OWNER OCCUPANCY RATES IN KEY US MARKETS
Ongoing declines in the percentage of foreclosed homes acquired by owner occupant buyers confirmed by newly published Index.
December 1, 2011 — San Diego, CA — New Vista Asset Management, a San Diego-based provider of real estate services for banks and other sellers of foreclosed residential homes, has published the results of a three-year study examining buyer types in 18 US counties hit hardest by America's mortgage crisis. The study uses data extracted from local recorder, courthouse and tax assessment records to determine whether the purchasers buying foreclosed houses from banks, HUD, Fannie Mae and Freddie Mac, are owner-occupants or absentee owners using single family homes as rental or vacation properties.
New Vista's data indicates that the percentage of REO homes sold to owner occupant buyers has decreased in almost every market analyzed by the company in a study that began tracking real estate sale transactions closed in the first quarter of 2009 and includes consecutive quarterly data through the third quarter of 2011.
"Although, quarter-by-quarter, we have observed some market-specific increases, over the entire period, owner occupancy rates for REO sales have broadly weakened," said Brian Hurley, New Vista's president and chief operating officer. "With eleven consecutive quarters of data, we can look beyond both seasonality and the temporary impact of demand stimuli such as the homebuyer tax credit, and observe a clear pattern of decline."
Hurley added that the pace and scale of decline vary widely across markets. In Los Angeles County, California, for example, the New Vista data shows 79.36% of single-family REO houses were purchased by owner occupants in 2009, compared with only 60.32% in the third quarter of 2011. Most counties covered by the study saw declines of more than five percentage points during the same period, with a few dropping more modestly.
"We are troubled by the significant drop in owner occupant purchases of REO properties in these hard hit markets, which is no doubt compounded by decreased access to credit and a failure to repair foreclosed properties to move-in condition," said Kevin Stein of California Reinvestment Coalition. "The increased investor acquisition of REOs is reversing the years of community development progress that nonprofits have facilitated throughout California. We need to ensure that lenders, nonprofits and government agencies are working together to give qualified homebuyers a fair chance to purchase REO properties and help stabilize residential neighborhoods," Stein added.
According to the New Vista study, only one county included in the Index (Wayne County, Michigan) had an owner occupancy rate for single-family REO sales below 50% in 2009. By the third quarter of 2011, owner occupancy rates for REO sales in an additional four of the studied counties had fallen below 50%, including Maricopa County, Arizona; Osceola County, Florida; Miami-Dade County, Florida; and Clark County, Nevada.
"The decline in owner occupant sales in Maricopa County over the past two years has altered the fabric of our neighborhoods," said Patricia Garcia Duarte, president of Neighborhood Housing Services of Phoenix and Chair of the Arizona Foreclosure Prevention Task Force. "We need to look carefully at this trend and refocus on giving homebuyers a chance to own a piece of the American Dream."
While New Vista has been tracking the study's findings since the first quarter of 2009, company management elected to formally publish the index in response to a growing focus on investor-driven solutions to the nation's residential real estate crisis. "Several initiatives now under consideration promise to channel more houses to investors rather than to owner-occupant purchasers," Hurley observed. "We timed the first release of our study to raise awareness of the community impacts that current REO disposition practices are already having. Bulk sales, drop-bid foreclosure auctions and the proposals under review by FHFA promise to move more REOs out of local real estate markets — out of the hands of owner occupants, out of the reach of local real estate professionals, and out of the capital base of these communities themselves. Before the market adopts new strategies to address an expected surge in foreclosure volumes, we wanted the owner-occupancy impact of current approaches to be well understood."
New Vista's "Index of the Percentage of Single Family REO Properties Sold to Owner-Occupant Buyers" will now be published quarterly. The company plans to increase coverage to include additional markets in 2012. Versions of the study that track owner occupancy sale percentages by individual REO seller are made available privately to the company's clients. The Index can be viewed by clicking here.
About New Vista
Founded in 2007 by multicultural real estate leaders Gary Acosta and Jim Park, New Vista Asset Management is a San Diego-based national REO management and marketing company that provides innovative and community-based outsourcing solutions for mortgage bankers, mortgage investors and regulated financial institutions. With the largest national network of multicultural real estate brokers, New Vista matches performance with creative REO marketing strategies that use foreclosure inventory to create affordable housing solutions and sustain homeownership rates in underserved communities. For more information about the company, go to www.newvistareo.com.
We are New Vista Asset Management, a privately held company that is dedicated to transforming the way foreclosure properties are marketed and sold. We believe REO properties can be the perfect affordable housing solution for those who want to achieve the American Dream of homeownership and the responsible way to convert losses into positive new beginnings for America's neighborhoods.