Rob Saxe's Blog

The Next Wave

With the “shadow inventory” still out there, lurking, there is a new threat to housing in the Sacramento region as values have declined to pre-2000 levels.  In some areas, even lower.

CNN Money came out with a special report that cited evidence that by 2011 when they see the housing market stabilizing that roughly 25 million borrowers nationwide will be underwater on their mortgages.

That number represents nearly half of all homeowners in the United States.

Half of all homeowners will be “underwater” by 2011!

Housing for the middle class for years has been a source of wealth.  The prevailing thought was that the first step to wealth was owning your own home.  That isn’t the case any longer.

What this realization is creating nationwide is “strategic default” or in simpler terms, people are walking away from there homes feeling as if it’s impossible for the value to come back to provide them with any possibility of financial recovery.

The article says that 26% of all defaults currently are “strategic” defaults.  And the hardest hit areas?  It’s not hard to find them.  All we have to do is look to our not so distant south.

Modesto and Stockton lead the list here locally and I’m betting Sacramento isn’t that far behind them.

The Question of the Moment

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California Foreclosure Rate Decreases

While the foreclosure rate has dropped in the state as a whole, the foreclosure numbers are still up 23% over May 2008 and California is second only to Nevada in foreclosure filings nationwide.  Bright spot?  If you want to call it that.

There isn’t a day that goes by where I don’t pinch myself and ask “is this really happening?”  There is absolutely no way I would have ever thought it would get this bad on one hand and this good on another.

With every bad there must be a good, right?  You’ve got to look hard but it’s out there.  For me, even though it’s my business, it’s tough to see.

Values Are Outstanding

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No End In Sight

Someday, this is going to end.  Someday, we’re going to look back on this and saying, “damn that was tough”!”  But for now, we have to adjust, make changes where necessary and above everything else, survive this troubled time.  We will, we all will and we’ll be stronger because of it and also, we’ll make much better financial decisions as a result.

I had a conversation with a prominent REO listing agent yesterday who clearly told me, “get out of real estate, go do something else, anything else”.  The sky is falling.  He may be right.  Our financial system is quite a mess and may need a complete overhaul to keep it above water.

Many People In Pain

Going through a foreclosure is possibly one of the toughest things that can happen to someone.  It’s not intentional, no one meant to lose their home.  It just happens.  Divorce, job loss, mortgage reset..there are so many reasons causing this to happen.

Once you’re in foreclosure, the goal is to get out of it and on to a new beginning.  Don’t beat yourself up though. I know the CEO of GM isn’t beating himself up for running the company into bankruptcy.  He’ll just take his bonus, go to Tahiti, have a few Mai Tai’s and retire wealthy.  Something just doesn’t seem right about that but that’s the way it seems to go.

Are You In Foreclosure or Close To It?

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2.4 Million Foreclosure Starts Projected for 2009

I’ve always thought of myself as the “feel good” Realtor.  I felt that my primary function was to watch out for the best interest of my clients and represent them as the law states by a code of ethics I’ve agreed to uphold.  I still feel that way but I’ve had to make a shift in my perception of this business.  I guess that’s the toll the “bad market” has taken.

This is tough, folks.  I know I’m stating the obvious but it just doesn’t look like this thing is going to end anytime soon.  All the indications point to that this will be “normal” for the next couple of years.

What Is A “Normal Market”?

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