Friday, December 01, 2006

Update on Distressed Properties

Just over two weeks ago, I wrote an article on the situation with distressed properties in our 4 county area. In short, my stats revealed than 1 in every 15 homes fell under the distressed properties umbrella. I classified a distressed property as: short sale, bank-owned, foreclosure, or foreclosure pending.

Today's numbers reveal the following:

Distressed properties: 1,196
# of MLS listings: 14,358

We've now gone from 1 in every 15 to 1 in every 12. This trend could get very ugly very quickly....

12 comments :

Anonymous said...

It looks like the higher proportion of distressed properties during the last month is due to both an increase in the number of properties in trouble, from 1016 to 1196, and a decrease in overall inventory, from 15,330 to 14,358. Re: the number of distressed, I think the foreclosure rate is starting to trend back up to a historically more normal level because the era of rapid appreciation in home values is over. Whether this portends a more serious situation, only time will tell.

Max said...

Don't discount the fact that there was a 10% increase in the number of distressed listings. AB does note in his past article that the distressed property listing feature isn't used by every agent, so the increase could be due to more awareness of the feature.

I doubt that's the case, however, since there is some stigma attached to "distressed" property. Also, an increase due to more awareness still tells us that listing agents are trying any tactic to market their properties.

Either way, not a good sign.

AgentBubble said...

Anon--We're talking about a 17% increase in the amount of distressed properties in just over two weeks. As Max pointed out, this could be related to more agents becoming aware of the correct way to enter listings, or it could be as simple as just having more sellers in over their heads.

As for the fact that the inventory numbers are shrinking, you'd think that distressed properties would follow the same pattern. The fact that they're not is even more reason to believe that this trend is quite serious.

Anonymous said...

Max and AB:

I agree that declining home prices are leaving fewer exit strategies for homeowners with too much debt. I think the decrease in inventory is seasonal, that distressed properties are more likely to stay on the market until sold (even through the holidays), but sellers waiting for the "clueless buyer from the Bay Area" are more likely to cancel their tired listings and set their traps out again after the new year. The good news is that, distressed or just overpriced, all sellers will have to pay the tax man on Dec 10th!

JR said...

Anon, Actually, you don't have to pay the tax man on Dec. 10th. You can let your taxes go delinquent. I think the county has 3 to 5 years before than can take the property for non-payment. Either way, the liablility is incured.

I just looked at some property in Houston. The tax rate is 1.2%, plus the school system gets to add their own assessment, in this case 1.9%.

This makes the total property tax bill 3.1%. Basically, you get to buy your home from the government every 30 years (3.1% X's 30 = 100% when compounded). Ouch.

The only difference is a regular house is about 1/2 the price of CA. ....and you have to live in TX.

sippn said...

1/2 of this increase in rate is due to the decrease in overall inventory - relook in January and see if this is really news yet.

AgentBubble said...

Out of curiosity, what do you attribute the 17% increase to? That's bigger news than the 1 out of 12...

Jeff said...

I'm looking for a home in Roseville, maybe Rocklin. Anyone have more specific info on what homes are going for there now? I want to buy from a builder so I get all the incentives, etc and take advantage of inventory. I'm worried that inventory is getting low in some places. I checked out DR Horton and they have sold a ton of homes in the past 3 weeks. If anyone can post a link from more info, or can post their opinion on the areas of value or an email address I can talk to you offline on, I'd appreciate it. Thanks.

Max said...

I'm worried that inventory is getting low in some places.

Are you for real? Your profile says you live in Roseville, and you would have to know an awful lot about the market in order to make a statement about inventory.

What kind of troll are you?

Anonymous said...

What's with the troll comment? So what if I live in Roseville and I do know a hell of a lot about this market. I've lived in the area for over 20 years and spend several hours every Sat/Sun looking at properies, walking the various housing communities, etc. I also spend hours each week studying other RE stats so I'm pretty familar with inventory. Was just seeing if other had more info, that's all.

Anonymous said...

LOL I just saw this main link about inventory and it CONFIRMED my generalization about the market so I think I'm comfortable with my statements and views on Roseville RE inventory Max. :) http://sacrealstats.blogspot.com/

Anonymous said...

MLS had 274 houses in zip 95765 and 432 in Rocklin in mid March. That's a lot more inventory than I've seen in the 5 years I've been watching it. If I remember correctly, it's 2-3 times the typical number of listings at this time of year based on the averages from 2001-2005