Tuesday, September 20, 2011

More foreclosures = decreased home prices and home values...

So first I need to apologize for taking so long to get a blog written. It seems I underestimated the amount of time needed to run a business. The good news is Capital West Realty is running strong, with three new agents! Scary I know, I am an employer. =)

Now that I’ve apologized, let’s get down to business.

About three times a day I get sent articles that relate to Real Estate and market trends, and the other day, one in particularly sparked my interest:

So if you have time you can read through it.
It has some pretty scary stats pertaining to foreclosure rates here in California, compared to those of the entire US. If you don’t have time to read it, that’s fine too, cause I will break it down for you. =)

According to RealtyTrac (which is a foreclosure tracking website) “foreclosure filings (including default notices, auction sale notices, and bank repos) went up seven-percent in August 2011... In fact, “default notices alone, went up 33% since July 2011.” That’s the biggest monthly increase in defaults since Aug. of 2007.

Now, “Notice of Default” is the first step of the foreclosure process… Usually the banks send out these notices after the mortgage holder hasn’t made a payment in three months… The letter, or “Notice,” usually says something like; Hey, you haven’t made a mortgage payment in three months and if you don’t make one soon, we (the bank), have the right to pursue taking the home back…

So basically this article is saying we will be seeing a lot more foreclosures in the near future… What is even more interesting, is that California has the highest percentage of these default notices in the nation.
Calif. 55%, Indiana 46% and New Jersey 42%” – RealtyTrac.  
Considering California already has the highest number of foreclosures in the US, (1 in 226 homes in California is in foreclosure) this latest jump in defaults, means soon, even more foreclosed homes will be on the market.

So if anyone has been holding out on buying a home, now is the time to start looking and getting finances together. That home that sold for half- a-million-dollars two years ago, could soon be hitting the market for well less than that…

On the flip side… If you’ve been looking to sell your home, because so many homes are in foreclosure and selling so cheap, the value of your home is decreasing also... This means if you list your home, you may have to settle on selling it for less than what you purchased it for.

So more foreclosures = more inventory = depressed prices… Depressed prices mean a slow real estate recovery for the next few years. Remember, we can only say we are in an actual “RECOVERY” when home prices are higher, and people are actually making EQUITY on their investments. That is something I just don’t see happening while more and more foreclosures continue to infiltrate the market.

If you’ve been thinking about buying or selling, let’s talk. I am a short-sale and foreclosure pro, and can make sure you get exactly what you are looking for and understand ALL your options.

Until next time,
CP
(916) 834-7003

PS: Here are more of those “scary” stats I was talking about regarding California’s foreclosure rates:
- RealtyTrac:

-A quarter of all foreclosures in the US are in California.
-Eight of the top 10 metro areas in the US for foreclosures are right here in our backyard:
Modesto = 2, Stockton = 4, Sacramento = 7.