The foreclosures are coming! The foreclosures are coming! But then again who really knows.
Category : Laguna Beach Real Estate
It’s no secret that banks are holding foreclosed properties in their hip pocket rather then taking a loss on their books. Last quarter alone there was a record of new foreclosures. Hey – no jobs – no house. Now its also – have job – house underwater – no house by choice.
But the banks have not been put them on the market. In fact in OC, over the last six months, the amount of foreclosures has become a much smaller amount of the properties for sale.
But there has been some early signs that this might be changing. See graph and article
In fact just this last week OC Coastal and South County foreclosures for a sale went from 113 to 136 properties.
My personal exposure
Over the past 4 to 6 months I’ve been representing several different investors that have been buying distressed properties – foreclosures and short sales. They range from major construction companies doing significant rehab to people who are buying to live in.
This has introduced me to people that have access to people far up the distressed property food chain. They are in the rare air of the bankers and asset managers that are in the know.
What are these people in the know saying?
They’re saying that since it’s the bank’s year end up, among other reasons such as they need to make room for bad commercial real estate loans, they are going to be ‘dumping’ (maybe to strong word) on the market.
They say this is going to be around the November to March time frame but I already see some early signs of this happening. False indications?
For the last 6 months the distressed property level (including foreclosures and short sales) from Newport Beach to Dana Point has been around 225 properties and it’s been staying in equilibrium. However, over the past 3 weeks it’s popped up to 275 properties. Many short sales will be the foreclosure in the future.
In Laguna Beach alone, for the last 12 months there have been 1 to 2 foreclosures on the market at any one time . Now there are 6 to 8.
Time to ‘Pay the Piper’?
What a bummer! Things have been stabilizing, at least on the low end. In fact, since there have been limited amount of foreclosures, there has been a lack of inventory at the low end less then $500k, to the point where a property will sell in less then a month with multiple offers.
But what happens if these foreclosures are put on the market. Everything the banks have achieved in OC by holding back their foreclosure inventory maybe for naught but who knows. We’ll have to wait and see.
What do you do if you want to buy distressed properties?
If you want to buy distressed properties – Be prepared! I’ll help you.
Watch the distressed properties on a daily basis. They go fast. You see one you like – lets go see it right away.
Email me or go to my web site and sign up for update with the area you want to watch.
Watch the trends? Per sqft cost trends are the most accurate and timely way to track pricing trends.
Keep your ‘powder dry’. (I love that term) Get your loan pre-approval and keep it current. The more cash you have the better. Investors are coming in with a lot of cash.
All the banks care about is getting the price they ask for with a financially worthy buyer. You buy ‘as is’ for sure. You still can do inspections that you pay for before making your final commitment but you’ll have to do it fast.
Read all you can on the subject. Read my blog. Pick out your market area and watch it closely. What types of house are you looking for and focus in on it. Go to open houses in the area….
Timing the bottom
You are not going to time the bottom. This is most important. Change that mindset.
Affordability is back for those that have jobs and that’s very important in stabilizing the market. As long as there is affordability the market will stay fairly strong. Once we get more jobs the low end will come back strong.
People who time the bottom mostly see the bottom in their rear view mirror.
If you believe in Orange County real estate and economy, then you know the values are going to come back over time.
I can help take the drama out of buying foreclosed property. Go to my website at and sign up for foreclosure updates now.
Please forward my email to your friends.