A foreclosure report issued today shows a month-to-month drop in foreclosure filings in January, although if history repeats itself that uptick may be a mere graphical blip before an impending storm of negative data on rising foreclosure filings on the horizon, some real estate experts say.
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Foreclosure activity fell by double-digit percentages from the previous month in California, where one in every 187 housing units received a foreclosure filing. California’s foreclosure rate ranked third-highest among the states.
It’s much the same in Long Beach and surrounding areas, where some local Realtors believe there’s a possibility of a flood of foreclosures coming—the calm before the storm so to speak.
“I find it hard to believe that people are surprised by these new numbers,” says Jeremy Colonna, a broker with Colonna & Co. Realty in Belmont Shore. “With unemployment continuing to rise, short-term interest-only loans beginning to adjust and lenders being forced to attempt modifications on borrowers with no hope of being able to make any kind of reasonable payment at all, the circumstances were inevitable.”
And Colonna believes more is yet to come. “Even with lenders like Wachovia, Wells and GMAC really trying to streamline their short-sale process, there are still going to be massive numbers of foreclosures on the horizon. Unfortunately, I have a feeling that many of the sales that took place the latter half of last year may be destined for the same fate. One of the side-effects of living in the United States is that our society is so optimistic that we will often times use more hope than logic in interpreting data. I don't think that prematurely predicting the end of the housing slump has done anyone, even Realtors, any favors.” [OUCH]
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Doherty also offers some answers: “What I do know is that in our area, the market is absorbing the REOs as quickly as they are coming on the market if they are priced right. We could certainly use more of them. The demand is huge and buyer interest and activity remains high, at least until the homebuyer tax credit comes to an end on April 30. Demand could also wane if interest rates rise when the Federal Reserve ends its support of the housing and mortgage industry when the program for purchasing mortgage back securities from FNMA, FHLMC and GNMA expires at the end of the first quarter [NOTE: THIS WILL NOT HAPPEN]. It’s been an interesting ride and we’re far from finished.”
Dennis Berry, a Keller Williams Realtor, asked around KW company offices in Los Alamitos and Long Beach and collected for Realty Bites a few offhanded remarks on the report from some of his fellow Realtors, which I think balances out some of the negative housing news we are hearing out there lately:
•“Housing seems to be doing okay in the Long Beach area.”
•“Our office had a busy December and a slower January, but February seems to be picking up.”
•“People are still interested in the tax credit.”
•“Our active inventory is around 959 in Long Beach, so there isn’t a lot of properties out there.”
•“Standard sales make up almost half the actives in the MLS.” [WOW. THAT IS SOME HARD-HITTING DATA. A COMMISSION-HEAD ASKING OTHER COMMISSION-HEADS FOR COMMISSION-DRIVEN ANECDOTES. I APPRECIATE THE ATTEMPT TO ADD BALANCE TO THE ARTICLE, BUT THE LACK OF DATA TO SUPPORT THAT OPTIMISM ONLY SERVES TO HIGHLIGHT HOW GRIM IT IS OUT THERE. BY THE WAY, SOMEONE SHOULD ASK THAT LAST DUMMY WHAT THE OTHER HALF OF MLS ACTIVES ARE.]
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Frankly, I don't think we'll see a surge of REO inventory this year. Or the next year. Or the next. We've seen how the extend and pretend games can go on pretty much indefinitely, and I see no reason for foreclosures to suddenly start in earnest. I hope I'm wrong, but the idea that there will be some enormous "tsunami" seems rather far-fetched at this point.
P.S. Check out this interactive unemployment map by county: http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html
Yikes!
I agree, El Bee. I don't see the tsunami coming either...lots of short sales maybe.
ReplyDeleteYou mentioned an interesting item here...those that bought the latter half of last year. Was this too soon? Will be an interesting topic in the next 2-4 years.
I picked up a GREAT book recently, "The Great Depression, a Diary." He specifically mentions how cheap RE (& stocks) became by 1931. He revists his original entries years later and notes that things continued on down for years. Those early great buys turned into disasters.
I highly recommend this book.
Speaking of short-sales, this zombie is back on the market: http://www.redfin.com/CA/Long-Beach/700-E-Ocean-Blvd-90802/unit-1004/home/7619284. I still think it's over-priced, but given the comps, I thought he'd sold. Betcha anything the bank isn't playing ball (and why would they be in any hurry to realize a $271,000 loss?).
ReplyDeleteAnon,
ReplyDeleteAhh, the guy from the "Not Selling? Try a Price Increase" post. I see his dipshit realtor still hasn't fixed those horrendous typos and punctuation errors.
The agent doesn't care, the bank doesn't care (like you said, it's in no hurry to take that loss onto the books) and the deadbeat tenant doesn't care because he can kick it for as long as he wants and is loving life.
And the sold comps are much nicer (this kitchen is an utter disaster) so potential buyers don't care either.
Many teachers in LA, Long Beach, and Orange County live in Long Beach. I think the massive layoffs taking place at the school districts will have to impact the housing market.
ReplyDeleteIf you've read some of the posts regarding the FDIC covering losses on the orginal amount of loans that are sold at a discount, you can see that a lot of "losses" on short sales are actually profitable with our tax money. Also the properties that are selling short are being handled by realtors who are hiding the listing so they can have an exclusive. I'd like to see a web site that outed these realtors.
ReplyDeleteI agree no tsunami of foreclosures, but what goes up must come down, something has got to happen with the excess inventory, which is continuing to build. If I hadn't bought already last month, I'd be happy to wait a couple of years because RE in the LBC is pretty far from hitting bottom, IMHO.
ReplyDeleteThis one of the lamest I've seen in a while:
ReplyDeleteThis property at 1168 East Ocean listed at a short sale at $200,000. Look closely at the only picture they show of a beach. This is not any beach in LB! It's some tropical beach somewhere. Love that aqua blue water. Lame,Lame, Lame!