Tuesday, June 10, 2008

Foreclosures.com calling bottom..

"“The numbers support what I’ve been saying for a while – the housing market is not as bad as what you hear,” says Alexis McGee, foreclosure information expert, educator, and president of ForeclosureS.com.The market is showing signs of forming a bottom as supply catches up with demand because fewer new homes are being built and buyers are flocking back into a much more affordable market. Yes there are tons of foreclosures glutting our inventory, but foreclosures are not increasing as many believe. And for the many homeowners who have already defaulted, efforts by government and industry helping homeowners work out their mortgage problems appear to be paying off,” " from their press release.
Here are what their local area numbers look like for Los Angeles and Ventura County. Click to enlarge any graphics.

Preforeclosures (I assume just NOD, they do not specify in their report):

REO broken out by month.

REO year to date. I have no idea how they got 71% increase from the numbers below.

There was a spike in March and 2 months that didn't match that spike after. Apparently that is turning a corner.

IMHO, LA/Ventura joined the bubble burst later than other bubble parts of the country like Florida, Arizona and Nevada. And other parts of the state like Central California, San Bernandino and Riverside. I think the places that broke down sooner will hit a bottom sooner. In LA/Ventura I think we have much further to go.

An example would be that the inventory that has been foreclosed is slow to reach market and lenders are overwhelmed dealing with the sales activity along with the preforeclosure and newly foreclosed homes. Anecdotal evidence of this can be seen by broker Jim Klinge in San Diego:

"Since the end of April when I had 20 properties sent to me, only three have made it to market. Another one got rescinded (stand-by, this one will be a story in itself) and three others have extenuating circumstances why they have stalled. But literally the other 13 are sitting vacant, waiting for Countrywide's asset managers to give me the green light to put them on the market."

I think calling a bottom is premature for the foreclosure issue, especially in our local area. Sales for 2008 may be the bottom, I could see making a case for that since prices are dropping. But dropping prices will exacerbate the foreclosure problem not ameliorate it.

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