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Foreclosures Surge In Region


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#1 Robert Giacometti

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Posted 15 September 2011 - 03:43 PM

My heart goes out to these people who are so struggling.

http://www.sacbee.co...mento-area.html

This news coupled with the State sending out 3300 layoff notices to employees is what the so called "experts" have been warning us about.

#2 nomad

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Posted 15 September 2011 - 08:12 PM

My heart goes out to these people who are so struggling.

http://www.sacbee.com/2011/09/15/3911662/after-years-lull-sacramento-area.html

This news coupled with the State sending out 3300 layoff notices to employees is what the so called "experts" have been warning us about.


Bank of America is insolvent. It will fall one day soon. Sub-prime mortgages resetting, it's a true disaster.

#3 rpo

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Posted 15 September 2011 - 08:55 PM

Bank of America is insolvent. It will fall one day soon. Sub-prime mortgages resetting, it's a true disaster.


All sub-prime mortgages already reset, so that disaster is over. The mortgages that are in the process of causing problems are the negative amortization loans that are currently recasting. BofA owns tons of those. Lucky them!

#4 Steve Heard

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Posted 16 September 2011 - 08:52 AM

I believe there are other factors coming into play as well:

The delay: I think, but haven't found the numbers to back it up, that a significant portion of surge has been due to banks trying to get their acts (paper trails) together to prevent the government from accusing them of improper procedures.

The walk-away: There are many people who are able to make payments but decide not to because they are upside down and decide to just let the bank take it back.

The short-sale with the uncooperative second: Recent legislation prevents second mortgage holders from going after short-sale sellers after agreeing to a short payoff. Some have refused to cooperate with short-sales or demand more than the first (or the seller) is willing to give, which leads the first lien holder to foreclose.

The only good news is that the number is expected dwindle month by month for the next year or so.

There is an expectation of a surge in short-sales next year, as home owners hope to get deals done before the mortgage debt relief act expires.

It is interesting to talk to buyers these days and listen to their positions. I was discussing this whole thing with a buyer yesterday. He's in contract to purchase a home for $235K. He runs a small business and his wife has a good job. He said that with his payment at about $1200 per month, they can afford the house even if only one of them was working, and it's cheaper than renting.

Another buyer I'm working with is an investor. He said he looks at the foreclosure situation as good news because that means more properties for him to buy and more renters to rent to. He feels he is not only making a good business decision but providing a service to the community by taking properties off the street and providing housing opportunities for those who have lost homes.

I just hope we get this over with and there isn't a second shoe to drop.

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#5 caligirlz

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Posted 16 September 2011 - 09:20 AM

As a recent returnee to home ownership, with a full time+ job, I was appalled by the condition of most foreclosed homes. I was not interested at all in buying one. I'm glad that there is a house-type & condition for most people.

I love my house. It's perfect for me. :D:

#6 Robert Giacometti

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Posted 16 September 2011 - 12:56 PM

The news about the increase in foreclsoures shouldn't come as a surprise to anyone. With all the job losses and unemployed/underemployed it seems logical that people won't be able to make their house payments without an income or adequate income.

Another scary part in the article was talking about the loss of revenues to Government agencies and the downward pressure on Real estate prices contributing to the spiral.

Looking at the basic fundamentals, the region had a population of X with unemployment of y which created Z amount of need for housing at W prices. With our regions population flat or declining, and the substantial loss of jobs, this greatly lessens the demand for housing at ANY price. ( Its why there are so many vacant homes out there) As prices decline housing becomes more affordable to the underemployed and some will reenter homeownership. Without an income ( JOB) people can't make house payments no matter how small.

So until the region either adds jobs or prices continue to fall so low that the underemployed can purchase again there WON'T be any recovery in the housing market. There might be seasonal aberations, similiar to Stock market gowing up for a couple of days when the fundamentals are trending down, but until we reach the point where the number of Jobs is generating enough demand for housing prices at W, values will continue to decline.

As I've said before, declining prices are good for that individual buyer and the agent working on the deal, but hurts the collective region overall by reducing the amount of revenue agencies collect.

I'm afraid there are still tough times ahead, until there is job growth.

#7 Dave Burrell

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Posted 16 September 2011 - 04:18 PM

I know of 3 separate families that lost their homes this month, not because of lost jobs but because the value of their homes changing so dramatically it wasn't worth it paying top dollar for it anymore. My own home is worth 100k less then I paid for it almost 8 years ago (and I bought before the bubble). No plans to move but dang that hurts. I'm figuring it will be about 10 years before it's back up to it's original value.

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#8 Steve Heard

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Posted 16 September 2011 - 04:37 PM

So until the region either adds jobs or prices continue to fall so low that the underemployed can purchase again there WON'T be any recovery in the housing market. There might be seasonal aberations, similiar to Stock market gowing up for a couple of days when the fundamentals are trending down, but until we reach the point where the number of Jobs is generating enough demand for housing prices at W, values will continue to decline.

As I've said before, declining prices are good for that individual buyer and the agent working on the deal, but hurts the collective region overall by reducing the amount of revenue agencies collect.

There is a combination of housing prices falling and rates falling (below 4%) which is doing just what you are suggesting: The under-employed are now able to purchase homes. I signed one for a couple yesterday. He is a supervisor for a big box store, not making much money, and she is a stay-at-home mom. They just bought a remodeled 3 bed 2 bath home for $142,000 and will have payments about about $1100 per month. That's about what they pay in rent now.

A client of another agent is a waiter at a local chain restaurant. He makes enough to purchase a home valued at $110,000, and there is a fair selection to choose from.

These are just two recent examples. Every home taken off the market is good for the econonomy, as is every dollar earned by the various parties (appraisers, lenders, handymen, inspectors, escrow companies, lenders and realtors).

Yes, there are seasonal cycles, but the area has seen sales far and above last year's and it has been continuing for 6 months. Let's keep our fingers crossed that it continues and that the job market rebounds.

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#9 Redone

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Posted 17 September 2011 - 06:08 AM

Looking at the basic fundamentals, .... With our regions population flat or declining, and the substantial loss of jobs, this greatly lessens the demand for housing at ANY price. ( Its why there are so many vacant homes out there)


Are you kidding ? So many vacant homes?

There is a LACK of inventory out there for people looking to buy a home. Less than 2 months inventory in most Sac zip codes and multiple offers. Finally the B of A will start kicking people out who haven't paid for 12-36 months like they should be doing.

I see so many people who are not paying their mortgage mention going to Hawaii, Vegas, or on a cruise that it makes me sick. 10 years ago people would never bring up at a party that they're not paying rent or short selling, etc let alone brag about spending the money. Hear it all the time now.

#10 (The Dude)

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Posted 17 September 2011 - 08:49 AM

Are you kidding ? So many vacant homes?

There is a LACK of inventory out there for people looking to buy a home. Less than 2 months inventory in most Sac zip codes and multiple offers. Finally the B of A will start kicking people out who haven't paid for 12-36 months like they should be doing.

I see so many people who are not paying their mortgage mention going to Hawaii, Vegas, or on a cruise that it makes me sick. 10 years ago people would never bring up at a party that they're not paying rent or short selling, etc let alone brag about spending the money. Hear it all the time now.


Really? there's a lack of inventory? I couldn't tell with all the houses I see in my neighborhood that have For Sale signs in front of them.

I too have seen people weaseling out of their mortgage payments and saving thousands upon thousands. Sure they're screwing everyone in their neighborhood by bringing their house values down but hey as long as they can make out it's all good right?

#11 Redone

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Posted 17 September 2011 - 08:56 AM

Really? there's a lack of inventory? I couldn't tell with all the houses I see in my neighborhood that have For Sale signs in front of them.

I too have seen people weaseling out of their mortgage payments and saving thousands upon thousands. Sure they're screwing everyone in their neighborhood by bringing their house values down but hey as long as they can make out it's all good right?


The article is about Sacramento, so I am referring to the greater area, not a specific neighborhood.

Yes, as long as you can get a couple of good vacations out of it , why pay your mortgage ? The new American way.

#12 Steve Heard

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Posted 17 September 2011 - 11:41 AM

Really? there's a lack of inventory? I couldn't tell with all the houses I see in my neighborhood that have For Sale signs in front of them.


There will always be homes for sale. I ran some numbers to compare last year to this one:

In the first 8 months of 2010, the year in which we had an $8000 tax incentive for first time home buyers, there were 541 homes sold in Folsom. At the end of August there were 291 homes on the market, a 4.8 month supply of inventory.

In the first 8 months of 2011, without those tax incentives, there were 675 homes sold in Folsom and at the end of August there were 187 homes on the market, a 2.2 month supply.

So yes, there is a lack of inventory and as you can see, a surge in sales. As long as buyers realize they can buy as cheap or cheaper than they can rent, plus they get tax write-offs and pride of owning their own home, they'll keep buying.

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#13 Robert Giacometti

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Posted 19 September 2011 - 09:09 AM

Are you kidding ? So many vacant homes?

There is a LACK of inventory out there for people looking to buy a home. Less than 2 months inventory in most Sac zip codes and multiple offers. Finally the B of A will start kicking people out who haven't paid for 12-36 months like they should be doing.

I see so many people who are not paying their mortgage mention going to Hawaii, Vegas, or on a cruise that it makes me sick. 10 years ago people would never bring up at a party that they're not paying rent or short selling, etc let alone brag about spending the money. Hear it all the time now.


Yes, vacant homes! Try driving around in different areas and you will see a number of vacant homes, that AREN'T listed for sale. These are the homes that I am talking about.

With the recent announcement of the significant increase in foreclosures won't these homes eventually make it to the market as being for sale? Except of course those that are bought at foreclosure and kept by the buyer.

#14 4thgenFolsomite

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Posted 19 September 2011 - 09:31 AM

There is a combination of housing prices falling and rates falling (below 4%) which is doing just what you are suggesting: The under-employed are now able to purchase homes. I signed one for a couple yesterday. He is a supervisor for a big box store, not making much money, and she is a stay-at-home mom. They just bought a remodeled 3 bed 2 bath home for $142,000 and will have payments about about $1100 per month. That's about what they pay in rent now.
A client of another agent is a waiter at a local chain restaurant. He makes enough to purchase a home valued at $110,000, and there is a fair selection to choose from.


Then I wonder why the affordable housing folks are still able to sue Folsom. Seems like we have a lot of affordable housing right now.
Knowing the past helps deciphering the future.

#15 caligirlz

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Posted 19 September 2011 - 03:29 PM

I was reading an article off my old favorite housing website and came across an article about LA County prices continuing to erode. Granted it is Southern California, not our Sacramento region, but I couldn't help but wonder why someone with such a significant downpayment would not qualify for a loan. I'm sure this is happening here, too.

There are a lot of people looking, but it's still tough to get a loan, even for regular, medium-income families," she said. "People can't qualify for loans because the FHA and Fannie Mae have such strict guidelines. If they loosened up a little bit home sales would increase dramatically." She and her husband had difficulty getting a loan on a $400,000 home, even though they came in with a downpayment of more than 60 percent. "Two lenders rejected us, and the third accepted us," she said.






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