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):
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?