The answer to your question is yes, absolutely!
Here's why: Lenders/Banks put the brakes on foreclosures during the later part of 2008 due to Federal, State and self-established moratoriums. Then came the announcement of the Presidentâ€™s housing recovery plan. As soon as banks/loan servicers heard a plan was in the works they had additional reason to throttle back on the foreclosure process. That all ended in March after the plans) were announced in late February 09 - there wasn't much for the Banks/servicers to be excited about. Since then, Banks/servicers shifted their Notice-of-Default and Notice-of-Trustee Sale machines into overdrive. The foreclosure process takes about 3 months, 3 weeks and 3 days (starting with the NOD). So look for a healthy spike in supply around the end of this summer. This is the so called "REO Shadow Inventory" you may have heard of.
http://docs.Steven-Anthony.com/REO-ShadowInventory.pdf (Article on backlog)
Another factor: resetting loans coupled with reduced property values, and double-digit unemployment in CA will add to the backlog of supply.
http://docs.Steven-Anthony.com/Resets.pdf (shows loan reset schedule)
http://docs.Steven-Anthony.com/OptionArmResets.pdf (shows accelerated loan reset schedule)
I may be wasting my time to respond to you, but your perspective is really funny!
You cited a news clip from cbs of 3-1/2 months ago to support that "Here is a great segment on why now is a good time to buy";
When justlooking cited a report from WSJ of 1 (ONE) day old to say that "why this is not yet a good time to buy", you then responded that "If you looking to buy in San Ramon, I suggest you look at statistics for San Ramon or the bay area, as all real estate is LOCAL......."
Your s**t really smells when you continue "The media likes to talk about National Real Estate trends as if it means something to your local area...."
Did that cbs news clip talk specifically about San Ramon?
In the seller's market boom, homes were selling in days thousands over last comps. This buyers market buyers are bidding DOWN properties or not offering over. The buyers receving homes are mostly the storongest financially. The only matter of consequece relevent to the seller is the buyer is financially viable. There is no guarentee of a close, no guarentee of receiving full price, and no assurance there will be no consessions, even in multiple offers. Cash strong buyers have the leverage and they are punishing the sellers for every flaw they can find knowing each new material fact will compromise what little leverage the seller has getting to close.
The reasons behind these numbers are the foreclosures and the banks offloading homes as quickly as they can. They are undercutting comps to move inventory as fast as possible. The sellers have no market strength. Even when they do appraisals limit price constraining market to a very limited range. The banks are doing the best at protect their margins but even in multiple offers the close rate percentage is below 70% (my preception).
The multiple offers are being driven by declining prices. The median number is up because higer priced homes (up to mid 800k) are now selling briskly pulling the median up. The bottom of the market (under 350k) is stabilizing but the market over 900k is still in distress (due to financing). Rest asssured the market may still move lower in the higher end.
Sure there are exceptions and I am sure you will find the one home that had 25 offers on a no contingecy contract and closed in15 days. Before you do I will sumbit 2 things.
1) There are still a lot of BAD agents and good salespeople out there who are doing what they feel they need to do in order to close transations. I wish them the best and warn the rest of you, caveat emptor.
2) For every 1 transaction you can find out there I will show you 10 to support my position.
It's a buyers market out there and the low prices and good financing just add to the challenges in this market.
I would advise some more homework. Most of the Dougherty Valley was not in existence in 2002. If you are looking for value in the high end there the prices are below 200 per square foor for homes over 4000 sq ft. That is right at retail construction cost. At the bottom end they are generally and solidly at $300 and holding.
The per square foot across San Ramon in tha last 6 moths of 2001 were 212-350 per square foot. We are there Andy.
Since the whole of Dougherty was built and sold in the boom, the foreclosures are defining prices, there is loads of inventory and if San Ramon works for someone there are some very nice newer homes available, in a strong school district in a desireable community.
What is the right time to buy a house? Once the house prices go down bellow the Year 1999- 2002 price range, thatâ€™s the right time to buy. So far I do not see that San Ramon house prices are near to that. So I will wait and watch till I found that it is stable enough.
So, just how effective is this new law in delaying foreclosures? Not very much in my opinion.
Note: This new law does not change separate legislation that requires lenders to wait 30 days before filing a notice of foreclosure after first making initial contact with a borrower who has missed several mortgage payments.
You're right; itâ€™s impossible to pinpoint the bottom. The market dynamics going on right now are "out of the box", subject to change, unprecedented, and darn complex.
As far as CA, historically, since 1968 (this is how far the available data from CAR goes) there has only been one time where California housing had consecutive years of price decline. That would be 1992-1996 (see chart link below). Note that after this period the entire decline had been made up within the following two years (92-96 total decline of 12.2%, 97-98 total increase of 12.5%). While past performance is not a predictor of future performance, ESPECIALLY GIVEN CURRENT ECONOMIC CONDITIONS, I still believe in the long-term resiliency of California as an international destination location for work and living.
With the FED continuing to buy Billions of dollars worth of mortgage-backed securities (MBS) at the 4-4.5% coupon level, conforming rates should hover at/under 5%. While the market bottom may or may not be near, the financial benefit of artificially low rates, accumulated over a standard 30-year timeline, may provide enough of a savings subsidy/hedge to act when an appropriate property is located. If inflation takes grasp due to all of the stimulus money, the FED would have to consider terminating their MBS purchasing. This would cause mortgage rates to significantly increase.
The big puzzle is how long it takes bank to let all problem house to be foreclosure and release it to market. It may depend on bank financial tolerance and how quick they want to get rid of these houses. If bank decides to slowly release the foreclosure house to market, no big price drop but it may cause house market recovery as bump 'L' shape. You might need to wait another 5 or 10 years to find the bottom. The question is: how long do you want to wait? The bottom line is that everyone is guessing; no one can give you clear picture.
THE ONLY SOLUTION OF THIS PROBLEM IS TO MAKE HOUSING AFFORDABLE BY RIGHT PRICE NOT BY CARROTS !!!!!
From (CAPS used to identify main points):
"Lenders in California now have to provide a 90-day moratorium on foreclosure proceedings where NO EFFORT was made to work with the borrower to modify the terms of a home loan under a new state law rolled out Monday.
Lenders and loan servicers that already have a comprehensive and systematic loan modification program in place are EXEMPT FROM THE LAW. Such programs call for loans to be modified by lowering interest rates for at least five years, deferring or reducing part of the principal, or providing up to 40 years to repay the loan.
The California Foreclosure Prevention Act law APPLIES TO first mortgages taken out between 2003 and 2007 for owner-occupied homes. CalHFA loans are NOT eligible.
The law is on top of separate legislation that requires lenders to wait 30 days before filing a notice of foreclosure after first making initial contact with a borrower who has missed several mortgage payments.
Some see this state law neatly folding ito the Obama administration's foreclosure plan that includes financial incentives made to lenders, loan servicers and borrowers who participate in loan modification programs. While Obama's plan includes lots of CARROTS, this one offers a STICK that prods lenders towards participating in efforts to keep owners in their homes."
Certainly interesting times! - Steve
Those hope there will be plenty of foreclosed homes for everyone is unrealistic...
I am in Santa Clara County, the buyers on low priced homes normally get a hand full of offers......
What does your Realtor say?
The only homes being sold right now are homes that HAVE to be sold. So inventory, particularly large homes like the ones you describe, and in that price range, activity is low and inventory is low.
Regarding the wave of foreclosures, I would not count on it. The wave, if we see one, will probably mirror the current inventory profile...lots of entry level condos, townhomes, and smaller single family homes.
I've been looking in the same area with other clients and am surprised at the low inventory for this time of year. I think many sellers are holding off thinking that the market will improve over the next year or so. I advise my clients not to sell unless they need to do so now or in the immediate future. Unless, of course they are upsizing, then it makes perfect sense to sell and buy up.
Anyway, you can always monitor the market by being placed on a realtor's MLS search program. Any one of us is happy to do that.
Trulia and other public sights are now always accurate and up to date.
Good luck with your search,
Suzanne Looker, 925-917-9070