NOW HOLD UP Mr. Real Estate Agent- Foreclosures are EVERYWHERE, Right?!
Oh gosh. We so want this housing crisis/ crash/ correction, whatever you want to call it, over with that I think we aren't wholly considering ALL the steps and pains we must go through to arrive at a normal real estate market (someday, right?)
Case in point, the stage the Southern California marketis at right now- especially The Pass areas in the eastern part of the Inland Empire, including the cities Yucaipa, Calimesa, Cherry Valley, Beaumont and Banning, California.
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We have had shortages in the foreclosure inventory for several months now- even to the point where agents are wishing upon a shooting star for the big bad banks to release their properties. Sorry! Ain't gonna happen! Or at least not all at once. The trickle method, spurred by the federal government moratorium and then by the bank's self-imposed moratorium, has worked in flooring prices and clearing inventory. And banks like that very much.
Some home buyers understand this, some do not. I know it seems counter-intuitive because you've heard nothing but HUGE foreclosure rate numbers for months and months and months. But just as inevitable as the correction was when prices were soaring a few years ago, so too is the correction at the bottom. I'll explain my use of the word "correction" at the bottom in a minute.
We've arrived at the stage in the game where other forces in this mess are effecting the way it is played. Yes, game changers are at work here. While people are still struggling and defaulting on their mortgages, banks are processing them differently. First, banks are attempting loan modifications with defaulting buyers, or at least that is what they SAY they are doing. Second, the banks are pushing defaulted buyers to short sale their homes before they foreclose the property. And third, in some cases the banks allow defaulted buyers to stay in the property AFTER foreclosure. It keeps someone upkeeping the property and vandalism down.
Now imagine how long a property being foreclosed might take to actually hit the market when its first put through the above property. Short answer: a lot longer than the standard foreclosure process of roughly three months.
Now here's the proof to my puddin':
I conducted a search on the Multiple Listing Service (MLS) for active (listed) standard sales, foreclosure and bank-owned REO sales, and short sales. Then a search for sold (closed) standard sales, foreclosure and bank-owned REO sales, and short sales from January 1st, 2009 to July 1st, 2009, for The Pass cities, including Yucaipa, Calimesa, Cherry Valley, Beaumont and Banning, in California. Here's the numbers:
Active Standard Listings: 342
Active Foreclosure Listings: 129
Active Short Sale Listings: 249
Sold Standard Sales: 140
Sold Foreclosure Sales: 500 (MLS will not report more than 500!)
Sold Short Sales: 103
I then took it a step further and conducted the same search from a year earlier, for sold (closed) standard sales, foreclosure and bank-owned REO sales, and short sales in Yucaipa, Calimesa, Cherry Valley, Beaumont and Banning, California from January 1st, 2008 to December 31st, 2008 closed sales:
Sold Standard Sales: 0
Sold Foreclosure Sales: 500 (Again, not accurate. The MLS will not report over 500 listings at a time!)
Sold Short Sales: 116
Shocking!!!! And not just the foreclosure numbers. I thought I had the numbers wrong at first! I even had my business partner, my wife Devona re-run the search just to make sure I wasn't wrong. I wasn't! (She said it was the first time in a while...)
I'm not going to quantify the numbers, but look at them again. They speak volumes about the state of the housing market in the eastern Inland Empire area. Agents, try it in your neck of the woods and let me know what you come up with!
The bottom line is this "crisis" will go through many stages before its all over. I believe were in the "Dawn of the Short Sales" stage, and I'm getting myself, and my buyers mentally prepared for it.
Oh yeah, and the "correction" at the bottom I mention? The housing market determines its prices just like the stock market- by what someone is willing to pay for a particular property, and what someone is willing to sell that property for. Like the upswing a few years ago, people's emotions and perception of value caused property prices to soar. Now, we have the exact opposite situation. Do you think there will be a "bottom correction"? I do.
Todd & Devona Garrigus/REALTOR
Certified Foreclosure Agent & Short Sale Specialists
Coldwell Banker Kivett-Teeters Associates
951-490-3698 Direct for Todd
951-490-3683 Direct for Devona
Check out our website for useful information and helpful tools!---> http://www.GarrigusRealEstate.com
DRE License #'s - 01844441, 01844442
