Commercial Real Estate Blog

The NAHB/Wells Fargo Sentiment Index guages the market sentiment of builders of single-family homes. The index has been tracking this data for over twenty years and the data they released yesterday indicates that sentiment is at an all-time low of 18. 50 is the median number, with any number over that indicates that more builders see conditions as good vs poor, and vice versa for numbers below that.

The index’s component indexes gauging current sales conditions and sales expectations for the next six months each remained unchanged in June, at 17 and 28, respectively. Meanwhile, the component gauging traffic of prospective buyers fell a single point to 17 indicating that there is no uptick in sight.

The data is available for viewing here:

• The NAHB/Wells Fargo Housing Market Index
• The NAHB/Wells Fargo Housing Market Index Components

Most of Silicon Valley has been unscathed by the sub-prime mess with bank-owned homes being a fairly uncommon site (with the exception of East San Jose). Lately however we have been finding more and more bank owned properties in more exclusive neighborhoods. For the past several years finding a bank-owned property in Los Gatos, Saratoga, Palo Alto, or San Francisco would have been very rare. While the number of properties coming on the market that are REO in these markets still remains low, we have noticed a few cracks begin to show in these high end markets.

What we have also noticed is that there is a fair number of NoD (notice of defaults) occurring in some of these higher end markets as well. The numbers are still insignificant in these particular markets to have any material impact as the market remains hot enough to allow people in trouble to get out safely, it is something to keep a close eye on as some good opportunities might be arising very soon.

Some of the sites for the lenders which they list their REO properties on include:

Bank of America REO

Countrywide REO

Wells Fargo REO