There is some short-term predictability to real estate.
Because foreclosures have a minimum 111-day notice period before becoming a trustee-sale candidate, we can check the foreclosure rolls and recent trends to anticipate the possible REO activity coming for the North SD County Coastal region.
Here is the historical pace of SFR trustee sales in NSDCC that went back-to-bene:
Here’s a chart below of the recent monthly totals – though the categories aren’t directly related, it can give you a feel for the current trends. It looks like fairly steady production, with some uptick lately – maybe some mid-summer banker vacations slowed things down a bit?
|Month||Back-to-Bene||New REO listings on MLS||MLS REO listings closed|
The number of SFRs with active notices:
NOD = 253 (54% received their first notice in the last 60 days)
NOT = 365 (Only 28% received their original NOT notice in last 60 days)
Total = 618
The loan-modification candidates are among the 618, so we may not see them come to market for a while, if at all (some will stick). If half of the 618 defaulters actually hit the court house steps, and wound up going back-to-bene, it would mean that the current count would take about a year to liquidate – which seems like the same pace we’ll been seeing. It would take a change in the ‘delay-and-pray’ tactics being employed by servicers to change the course.
There have also been 553 cancellations this year too, which you would think were due to successful short sales. But in the MLS there have only been 151 short sales closed, and another 125 currently marked contingent or pending – which is only half of the cancellation total (though not every agent marks their listing in the ‘sales restrictions’ box, the MLS criteria used to count here). The banks/servicers might be letting a couple of hundred people float around for now?
REO listings vs Other detached listings that have closed since April 1st:
|# of closings||86 (7%)||1,182 (93%)|
|Avg DOM||41 days||67 days|
Trying to gauge how many buyers are left isn’t easy. But if banks/servicers decide to rush the exits, they would provide welcome relief for those trying to find attractively-priced inventory, and put a little pressure on the elective sellers who are currently happy to ignore 7% of the market. If the REOs doubled or tripled in North SD County Coastal, it would likely shake things up, with the biggest impact being on the elective sellers who wouldn’t be getting as lucky as they are now.