Sacramento Real Estate Views

Sacramento Foreclosures

The Next Wave

With the “shadow inventory” still out there, lurking, there is a new threat to housing in the Sacramento region as values have declined to pre-2000 levels.  In some areas, even lower.

CNN Money came out with a special report that cited evidence that by 2011 when they see the housing market stabilizing that roughly 25 million borrowers nationwide will be underwater on their mortgages.

That number represents nearly half of all homeowners in the United States.

Half of all homeowners will be “underwater” by 2011!

Housing for the middle class for years has been a source of wealth.  The prevailing thought was that the first step to wealth was owning your own home.  That isn’t the case now.

What this realization is creating nationwide is “strategic default” or in simpler terms, people are walking away from there homes feeling as if it’s impossible for the value to come back to provide them with any possibility of financial recovery.

The article says that 26% of all defaults currently are “strategic” defaults.  And the hardest hit areas?  It’s not hard to find them.  All we have to do is look to our not so distant south.

Modesto and Stockton lead the list here locally and I’m betting Sacramento isn’t that far behind them.

The Question of the Moment

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Tags: sacramento foreclosures

1 Million Foreclosures in ’09…so far

2.4 Million Foreclosure Starts Projected for 2009

I’ve always thought of myself as the “feel good” Realtor.  I felt that my primary function was to watch out for the best interest of my clients and represent them as the law states by a code of ethics I’ve agreed to uphold.  I still feel that way but I’ve had to make a shift in my perception of this business.  I guess that’s the toll the “bad market” has taken.

This is tough, folks.  I know I’m stating the obvious but it just doesn’t look like this thing is going to end anytime soon.  All the indications point to that this will be “normal” for the next couple of years. While I would prefer that we return to a moderately appreciating market where there are good values and people are prospering, I don’t always get my way. Damn it!

What Is A “Normal Market”?

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Tags: sacramento foreclosures

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

Is This The Bottom of the Market?

Some Indicators Say This Could Be It

I keep my ear to the tracks regarding the real estate market in the Sacramento region.  I love it.  Analyzing data about the market is a lot of fun for me.  Lately, things aren’t adding up though.  I’m going to present a theory here that may be totally inaccurate.  It is plausible however and, after talking to a couple of my teammates about it, it could be that this market has reached the bottom.

I have seen the predictions that our region will lose another 15% to 20% this year.  Until today, that’s what I thought was most probable.  Here’s what we’re seeing now:

#1  The Foreclosure Rate Increased

From November to December, the number of NOD, notices of default, the first step in the foreclosure process, increased well over 30% in the Sacramento region.  The moratoriums that have been instituted by state legislation failed to work.  Delaying the inevitable?  Yes or maybe?  The January numbers won’t be out for another 9 days.

#2  The Inventory Decreased

The inventory, homes actively for sale, has decreased from January to February by 2.25%.  Not a large number but if you look at it, all moratoriums aside, it still doesn’t add up.  Seasonal you say?  The NOD’s increase but the inventory decreases?  What about homes that were foreclosed on prior to the start of the September 1 moratoriums?  Where are they?

#3  70% of Foreclosures Are Not on the Market

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Tags: sacramento foreclosures, sacramento homes for sale, sacramento real estate

Foreclosure Rate Nearly Doubles

Rate Nearly Doubles November to December

ForeclosureRadar.com reports that the foreclosure rate, notices of default sent to homeowners, nearly doubled from November to December of 2008.  This brings the foreclosure rate back up to the second quarter of 2008 record levels.

This was caused by the State of California Senate Bill 1137 halting all foreclosures that took effect in September.  All the bill did was stall the foreclosure process and now the glut of inventory that we saw coming in October is here.  Goodbye home values, hello investors.

If the government would restrict it’s activity in the private sector, maybe we could have this crisis happen gradually rather than all at once preserving whats left of the already crushed home values.

The large inventory numbers that will surely be coming on the market over the next few months will depress values in the area further and while it is likely that once most of it is sold the values will rebound quickly, who knows if it will come back as strong as it is now, which, incidentally, isn’t very strong!

The Government Involvement

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Tags: sacramento foreclosures

Foreclosures In Sacramento

Are You Worried About Losing Your Home?

I visited the SHRA, Sacramento Housing and Redevelopment Agency, and they had a load of information regarding foreclosure resources so I thought it might be good to pass it along.

There have been many, as there always seems to be, cases of fraud regarding those attempting to take advantage of others who are in in trouble.  This housing market is no exception to that.  Here are a couple of things to watch out for:

1.  Anyone who calls or comes to your home offering to help unsolicited.

Some areas of the region are more prone to foreclosure than others.  The unscrupulous could target these neighborhoods and take advantage of folks having  a hard time making their mortgage payments.

2.  Anyone who offers to let you stay in your home if you pay them rent.

3.  Anyone who asks for a security deposit and first month’s rent in cash for a rental home.

I’ve seen single mothers displaced by this one.  It’s a tragedy of the market and it does happen.  Never pay anyone who asks for cash upfront in this market or any market for that matter.

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Tags: foreclosure resources, homes in sacramento, sacramento foreclosures