Of all the lots in Cupertino, this one has to take the cake for oddest of them all.

10081 PENINSULA Ave Cupertino, CA 95014
Beds: 3
Baths: 2.5
Sq. Ft.: 1,525
$/Sq. Ft.: $616
Lot Size: 8,504 Sq. Ft.
Property Type: Detached Single Family
Style: Mediterranean
Stories: 2
Year Built: 1997
On Redfin: 84 days

Foreclosed homes sell at almost one third off. Of course, the discount depends on what percentage of foreclosed homes are in the market. Nationwide, about a third of all home sales were foreclosed properties whereas California’s percentage is a whopping 51 %.

Bank-owned properties sold for an average 34 percent discount in the first quarter, up from 32 percent both in the previous quarter and a year earlier. Such properties accounted for 19 percent of all U.S. home sales, up from almost 16 percent in the fourth quarter and down from 21 percent in the first quarter of 2009, RealtyTrac data show.
…
California ranked second, with such sales accounting for 51 percent of all sales and Arizona was third at 50 percent.

$1,300,000
22481 WALNUT Cir Cupertino $1.3M 4B4b 2700 lot 8250

Listing says “4 bedroom could be 4/2 & 2/2 or 3/2 & 3/2 if walls put back” !!
The attic is used for a children’s bedroom, fine and dandy except for those hot summer days. Property is on Foothill.

7369 WILDFLOWER Cupertino 3B 2.5b 2680 Condo
From $1.05M to $850K in 5 months of listing

7365 WILDFLOWER Cupertino 3B 2.b 3210
From $1.3 to $1.06 in 8 months

Each unit shares one or two common wall.
HOA fees are $350/mth, somewhat high given the lack of any major common facilities.

22561 RICARDO Rd Cupertino 4B3b 2830 sqft 0.27 acre

Looks like an REO possibly incomplete construction judging from the pic ,”Commission To Buyers Agent and Take Property As Is” after close to 300 DOM makes for an interesting case. Property taxes show $1.8M of taxable value, property was listed at $1.7M in 2009 and “MLS sold” (foreclosed?) in Apr for $1.55M

Bank of America unveils a principal reduction program.
According to the company, the decision was brought upon by the rising rates of “strategic defaults”. Is the industry reaching an inflection point ?

…the bank unveiled this innovative approach to employing a principal reduction as the first step toward reaching HAMP’s affordable payment target of 31 percent of household income when modifying certain NHRP-eligible mortgages — ahead of lowering the interest rate and extending the term. The reduced principal balance will be a non-interest bearing forbearance amount, and the homeowner may earn forgiveness of the forborne amount by remaining in good standing on payments.
…
NHRP-eligible loans include subprime, Pay-Option ARM and prime-quality two-year hybrid ARM loans originated by Countrywide on or prior to January 1, 2009, if the amount of principal owed exceeds the current property value by at least 20 percent and the loan is 60 days or more past due.

[i]On the conference call to announce the program this morning, B of A’s credit loss mitigation executive, Jack Schakett, said the amount of strategic defaulters (those who can pay their loans but opt not to) are “more than we have ever experienced before.” He went on to say, “there is a huge incentive for customers to walk away because getting (Ed: one year of) free rent and waiting out foreclosure can be very appealing to customers.”[/i]

California Jumbo loans in distress tripled (!!) from last year’s rate in March to almost 12 percent.
With cure rate at 10 percent, 9 out of 10 of these distressed loans are expected to default.

California prime jumbo loan performance continued to weaken in March, with 60+ days delinquencies rising to 11.8% from 11.6% in February (and 5.4% in March 2009). During the first quarter of 2010 Florida had the biggest jump (1.5%) of the five states with the highest volume of jumbo loans outstanding. New Jersey
was second of the five states with an 1.1% increase over the same period. The five states with the highest volume of prime jumbo loans outstanding (California, New York, Florida, Virginia, and New Jersey) combined represent approximately two-thirds of the total sector. Prime jumbo RMBS 60+ days delinquencies for these states at March 2010 compared to the prior month, and their approximate share of the estimated $371 billion market, are as follows:
–California: 11.8%, up from 11.6% (44% share of the market);
–New York: 6.7%, up from 6.3% (7% share);
–Florida: 17.5%, up from 17% (6% share);
–Virginia: 5.8%, up from 5.7% (5% share);
–New Jersey: 8.2%, up from 7.9% (4% share).

Housing prices are softening across the country as the industry appears to head towards a second dip. Expiring stimulus programs, an expanding downturn in Europe’s economy and China’s crackdown on overexpansion would take its toll on the US economy.

However, prices in the SF region are still in the black as shown by the latest Case Schiller report of 16 percent increases from last year. Regions such as Las Vegas, Detroit and Seattle did not fare as well with prices heading downwards again.

The 2010 first quarter values fell compared to the 4th quarter of 2009; … From there, the 4th quarter of 2009 and the 1st quarter of 2010 saw a combined pull back of 4.2%. …
Looking at the monthly statistics, 13 of the 20 metro areas showed a decline in March compared to
February. Boston was flat. Eight MSAs posted new index lows in March – Atlanta, Charlotte, Chicago,
Detroit, Las Vegas, New York, Portland and Tampa. Las Vegas and Phoenix have peak-to-current
declines of 56.3 and 51.8%, respectively. On a more optimistic note, Los Angeles, Minneapolis, San
Diego and San Francisco have shown recovery from recent lows of +7.2%, +7.4%, +10.9%, and +16.2%,
respectively. San Diego, in particular, has stood out with 11 consecutive months of increasing home
prices.

New home sales reached record lows in January as the economy appears to be headed for a double dip, dropping 11 percent last month to a seasonally adjusted annual rate of  309,000 units… the lowest since 1963 !!

January’s weakness was evident in all regions except the Midwest, where sales posted a 2.1 percent increase. Sales were down 35 percent in the Northeast, 12 percent in the West and almost 10 percent in the South.

The drop in sales pushed the median sales price down to $203,500. That was down 5.6 percent from December’s median sales price of $215,600, and off 2.4 percent from year-ago prices.

New home sales for all of 2009 had fallen by almost 23 percent to 374,000, the worst year on record.

Fannie is now into short term loans through a private financial firm, to boot.

The government-controlled mortgage investor has established the program with Guggenheim Partners LLC, a New York-based financial-services concern, which provides short-term funding to mortgage firms through its NattyMac subsidiary.