Friday, January 2, 2009

Ventura County short sales & foreclosures 70% of closed sales - December 2008


These are preliminary numbers for December and the totals could change by 10-15% in the next few weeks but the ratios should be about the same. It is amazing that 70.92% of sales were distressed in some manner. And of the remaining 29.08% there was a high number of vacant, relocations, trust / probate, and investor owned sales. I estimate that only about 15% of closed sales in December were by sellers who owned their home and were currently living in it. I think the banks were trying to clear the decks as much as possible to put the losses in 2008. If the banks could push this level of volume during January and February I will be impressed. If they are able to it will clearly be a matter of pushing price and crowding out discretionary sellers.

4 comments:

Noz said...

Effective:

Happy New Year and thanks for the continued data...very helpful.

Question for you...what would you call a discretionary seller these days?

Just off of REDFIN, by the way, I'm seeing homes that not even 5 months ago were priced in the mid-$700k...say in Porter Ranch...now going for $450 or so. I think it's going to get worse.

Being that I'm a buyer waiting, I don't mind....I can stand the reduction.

Effective Demand said...

Happy new year to you too Noz!

A discretionary seller is someone with equity who would like to sell (trade up, retire, voluntarily change jobs, etc) but "can't" because they don't like the price the market is giving them.

What I think is interesting about disrectionary sellers is the belief/hope that the market is going to recover in the face of all the evidence to the contrary (high unemployment, record foreclosures, massive depreciation). December 2008 was a horrible time to sell a home but it isn't like any of the months next year are going to better (price wise, imho) and it is clear that the previous months of 2008 were better than December. Delaying only gets less not more.

Noz said...

I agree...and I'm counting on it!

Honestly, it amazes me sometimes. I'm an engineer so numbers and calculations are a way of life for me when I evaluate a purchase...especially a big purchase like a home.

And everytime I look around and see the cars people drive, and the homes they have...many of my friends included...I am simply amazed at how they do it. My wife and I combined make 6 figures....but we could not live the life some of our other friends live. And believe me, it's not like we make alot less...at least I don't think so.

$800K homes, two nice cars, kids, etc....unless they are making well over $250K per year...which I doubt, I can't figure it out.

I can only keep my fingers crossed for prices to keep coming down hard this year....another 20% I hope.

Effective Demand said...

Credit has been so easily available for the last 10-12 years that people have gotten themselves leveraged (borrowed money) very highly. There really hasn't been too much downside to leverage for quite a long time. If you leveraged yourself in the stock market you got higher returns, If you leveraged yourself in a house you got a bigger house (that was appreciating very rapidly), people were richly rewarded for taking on debt.

Now those debt people are going to see why it turns out that wasn't such a great idea. The question is how long will it take to unwind and how far will it go? It was a decade for spenders, now savers will be rewarded.