By now we’ve become comfortably numb to the sensational foreclosure headlines.
Yesterday, from RealtyTrac:
A record total of 102,134 bank repossessions were reported in September, the first time bank repossessions have surpassed the 100,000 mark in a single month.
A juicy headline, but not much help for those trying to analyze their local real estate market.
Here are the number of foreclosed SFRs, and number of MLS detached sales by quarter for North San Diego County Coastal (Carlsbad to La Jolla):
| 1Q | 2Q | 3Q | 4Q | ||||||||
| Year | F/C | MLS | F/C | MLS | F/C | MLS | F/C | MLS | |||
| 2008 | |||||||||||
| 2009 | |||||||||||
| 2010 |
It’s not like sales have plummeted because of foreclosures. In fact, there doesn’t appear to be much relationship between the number of foreclosures, and number of MLS sales – even though foreclosures have increased since 2008.
Have the foreclosures affected pricing? While the pricing has been trending downward in the region, it is still relatively high – averaging $375/sf last quarter:
The decline from the peak of $494/sf in 3Q05 to the $375/sf last quarter is 24%. We’ve been averaging 557 sales per quarter (185/mo), which is still more than 5x the average number of foreclosures we’ve been having lately. Rather than how many foreclosures, the real question should be: Are there enough buyers to keep pricing at these levels?
“Are there enough buyers to keep pricing at these levels?” Good question!
But, who knows how to answer, anyone?
Yes. And to illustrate, simply refer back to “Solana, Encinitas/Leucadia and Carlsbad Pendings”. There is an endless line of buyers for these areas.
Testing new blog features.
annabama didn’t fit in the box?
Trying to stay under the radar 🙂
Many readers on blogs like this or CR are in the category that believe housing prices are overvalued and due to collapse again.
However, Jim keeps informing us with real data and anecdotal examples from the SD market that it is difficult for buyers to find a great house at a reasonable price.
With the MERS issues, foreclosure moratoriums, lawsuits galore, it seems that the likely outcome is a dribbling out of the foreclosure properties over the next decade which will lead to a stable RE market.
My sense is most (if not all of us) would prefer that the system clears itself very quickly and we start over with sound UW. If that’s not going to happen, then prices will remain sticky I conclude.
Any other thoughts?
BTW – mortgage lawsuits are the new asbestos’s claims (for the legal profession perspective).
The lawyers are going to make out nicely, and we’ll be seething for the duration.
Congress will put a fancy bow on powerful-sounding new-MERS legislation that’ll sweep the taxpayers’ losses under the carpet.
And that’ll be the end of it.
People just want to know how much, and who’s to blame.
How many buyers are left?
It’s already a very crowded buyer pool.
I’m still looking for active listings not selling that I thought should have sold easily. I haven’t seen one yet, at least not around NSDCC.
The inventory is so thin that there aren’t enough good houses for sale to satisfy the current demand.
If you buy a house today, it will be a result of a relentless pursuit for weeks and months looking for just the right fit.
You’ll end up spending more than you want, but you get something you really like – and it’ll probably last you forever.
“Yes. And to illustrate, simply refer back to “Solana, Encinitas/Leucadia and Carlsbad Pendings”. There is an endless line of buyers for these areas.”
Wait, didn’t we just see a video that said 1 closing in Del Mar and 0.0 closings in Solana Beach this month? It’s these areas and La Jolla which skew the averages so high.
I’m not sure that answered the question.
Hard to quantify the number of buyers, because there are different levels of involvement – but if you count all of them, there’s plenty.
1. The relentless pursuers – the folks who will succeed in buying a house.
(except for those buyers who have a lucky break and a house falls in their lap – which rarely happens though, because sellers want to see what they can get on the open market)
2. The casual lookers – they check the internet, look for some pretty pictures, don’t find many and give up.
A couple of months before the lease is due, they call Jim the Realtor for a couple of tours, hoping to get lucky.
3. The out-of-town lookers – could be in either group 1 or 2 above, but because of the distance they are just kidding themselves. Unless you are here looking in person, someone will always beat you to the quality buys.
Unless you know a realtor who is on-duty, and is handy with a camera.
>>> Will it get to the point that it’s easy to find a good house for sale at a decent price around NSDCC? Not sure, but I think we can agree that it’ll be crazy from here on out.
It was easier when houses were $200,000 and less. But I think society got so juiced up from this last run that we can’t wait to do it again.
The Blur – are you a parent yet?
“If you buy a house today, it will be a result of a relentless pursuit for weeks and months looking for just the right fit”
Try years….
LCV Wannabe-In most areas, the time to buy was about 18 months ago. Supply was much higher than now (especially of non-short sales), and prices were lower by 5-15%. If you were looking during the first half on 2009 and didn’t find anything you wanted at a price you were willing to pay, give up, because you will never find anything, IMHO.
Hi Jim-Comment #10 piqued my interest. I’m a number 1 and 3, out of town in Northern AZ, but a SoCal native coming home. How is it we are kidding ourselves? 4 trips, about 20+ homes toured, and 3 failed offers (won’t participate in the bidding wars). If a house comes onto the market and tweaks us right, we’re there to tour in 6 hours. Just curious…
Oh, I neglected to mention, this is in in the last 45 days. 🙂
You’re an exception, sorry.
I love the people who come here for free information even though they using somebody else for their realtor, and then pepper me.
Sorry JTR, did not mean to offend. Our buyer agent is pretty good, and I did not know about you until after we started looking. She’s spent a lot of time with us and my credit union gives a rebate to use with closing costs if I use her. Although I’d go with almost anyone who could talk some reason into a particular seller/lender of a particular REO ;).
I sure am! And Blur Jr. is already a big fan. You don’t have any bubbleinfo onesies, do you?
Geotpf,
I generally agree with you, though we haven’t given up. Back during that time frame we were quite weary that the coming flood of foreclosures was going to make the market dip even further. We based a couple of offers on that premise. Both were REOs. Of course in the end TARP didn’t help us out there. So much for financially responsible people being able to prosper in a free market…