Sacramento Real Estate Views

The Foreclosure Wave Is Coming

Banks to Release “The Shadow Inventory”

Through moratorium after moratorium, it appears now that the wave of foreclosures that we’ve heard are out there will be coming on the market over the next 60 days.  An article of the front page of the Wall Street Journal, “Banks Ramp Up Foreclosures” alludes to just that.

Chase, B of A, Citi and Wells are preparing to release the homes that have been foreclosed on over the last 6 months or more to the open market.  Let’s hope there is something less than reckless abandon in this release.  Home values in the Sacramento/Placer counties area could be severely impacted by a less than restrained approach.  The doomsayers are having a field day with this one.

Delay Rather than Prevention

Is there really anything that can hold off foreclosure other than a healthy economy?  I was at a party last night and listened to an appraiser who believes that there is nothing at this point that can be done to prevent the crushing wave of foreclosures from coming on the market in the coming months.  “The banks have to get these off their books”.  That may be more true than he knows.

(Here is something from the blogosphere..can you say “National Moratorium”?  That should give the government plenty of time to take over all the banks rather than just a few!)

With increased scrutiny by the goverment, the banks have to get healthy.  I read this week that the 24th or 26th bank of the year has failed.  While some of the chaff will be shed during an economic downturn, that seems like an excessive number of failures in such a short period of time.

What Does This Mean to You?

If you’re selling a home in the Sacramento area right now, price it to sell and be done with it.  If the wave that looks like it could be coming does indeed materialize, you’ll get a better price now than you will in 3 months.  More supply  means less demand and lower prices.  Simple economics.  The sharks are circling!

If you’re in the market to buy at the moment, you could either hold onto your hat and sit tight hoping that values will further deteriorate or buy now thus assuring yourself a home at prices not seen in the region since 2000 or earlier (depending on where you’re shopping).

I never like betting on what might happen.  Too much luck involved in that.  No one knows what will happen in the next 60 days but we sure know what’s happening right now.  It looks pretty good if you’re buying.

Buying or selling a home in the region?  Either way, we can help you get there.  Give us a call.

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Tags: sacramento foreclosures, sacramento homes for sale

This entry was posted on Sunday, April 19th, 2009 at 6:00 pm and is filed under Foreclosure Statistics, Real Estate Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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