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No Foreclosed Home Surge in Sonoma

The big surge in foreclosed homes we have been told is coming has been a big yawn so far in Sonoma County. Buyers are aggressively bidding for decently priced homes on the market and sales are brisk. As an example of the drying up of REO inventory, there are less than 100 bank owned single family homes for sale in Sonoma County. Chart of REO status on MLS in July in Sonoma County That's down from 160 in April and 300 or more in January. That translates to a couple dozen foreclosed homes for sale in Rohnert Park or Windsor. When your home buying universe shrinks to that few to choose from, you can get frustrated easily. The reports of a surge of new foreclosure default filings in Sonoma County is welcome news to buyers (if not delinquent owners), but the homes in question are a long way from hitting the market.

The reality is that if you're looking for a great value REO home you are going to be fighting other smart buyers, both investors and first time buyers, who are looking for the same thing. On the street that means that the first days a new REO listing has been posted is going to be a scramble as real estate agents stack up with their buyers to get a look and figure out not just if they want to make a bid, but how much of an overbid they may have to make. It's clear there is a lot of pent up demand for affordable housing.

I'm curious about other parts of the country. Are you seeing a new wave of foreclosures? Are you still dealing with multiple offers and overbids?

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Posted by Dave Roberts on 08/16/2009 11:26 AM

Comments (10)

Sonoma County Has No Surge in REO Listings in the Real Estate Market Channel

overbids, foreclosure surge, sonoma reo, sonoma bank owned homes

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10 Comments on No Foreclosed Home Surge in Sonoma

AUG

The REO inventory has also gotten a lot smaller in Maryland. However, there are a lot of foreclosures in the pipeline and we expect another surge of lender owned properties. Hopefully, the market will be able to absorb them without further disruption.

I think it is about the same we are seeing multiple offers on REO properties-even going above asking price. The FTHB needs to get out and start looking time is running out for the credit.

Roy, are you seeing a lot of overbids?

Pat, do you think the multiple offers are from FTHB and the tax credit or other reasons?

Hi Dave, I'm here in Napa and I'm sure you know the story is the same. I've also been waiting for the "surge" of REOs coming on the market. My clients are getting frustrated, specially the FHA clients that are competing with investors. It's a frustrating market. Thanks for the post, I empathize with you!

Breanna, I think the surge might be like the boy crying "wolf". By the time it actually happens, nobody's going to notice.

Dave - Down here in LA & Ventura counties, a good portion of our active listings are either short sales or REO. Although I don't have the most recent numbers in front of me, I did see some reports not too long ago that indicated that nearly half of our sales were either short sales or REO's.

What I do hear a lot of from my clients, especially my first timers, is the fierce competition with all cash investors. What's even more disconcerting is that many listing agents and their bank/sellers are now accepting lower cash offers over higher financed offers. WTH???

this makes no sense to me. Instead of helping first timers realize the dream of homeownership and stabilizing these communities that have been devastated by foreclosures with the stability of homeowners, these communities are being saturated (again) by investors who are purchasing these properties, making the fewest repairs possible to bring these dilapidated properties to the minimum of standards in order to rent them out.

Sorry for the long comment but this topic is a rather sensitive one for me and many of my clients.

Donna, that's a great comment. I think you should post about this issue. Getting markets to work effectively for first time buyers is hugely important and right now FTHBs are having a hard time. In some cases, an almost impossible time trying to get their foot in the door. I don't have any answers, but I'd love to see a discussion about this.

Dave~

Your point: " It's clear there is a lot of pent up demand for affordable housing." is something I have been considering for some time....Here in Asheville there are few REOs compared to the rest of the USA, it seems...and ...last I checked we only had 19 short sales...

I am hoping you will expand on that pent up demand for affordable housing

janeAnne - girl, you are so close to 300,000 points! I wish your comment on this post would put you over the top, but I think you're going to have to wait for a few more posts and comments. Congratulations to you for all the great work you do on this site and in your career.

Pent up demand is probably a good topic for a post. When I see consistent patterns of overbidding and multiple offers it shows me that there are more buyers than low cost homes. It's not scientific or quantifiable, but everyone commenting here has indicated a similar situation prevails in their areas. More buyers than low priced homes.

AUG

Close to your home, Dave, in Marin county, we are seeing the same thing, very few REOs and less Short Sales, any perceived 'bargains' - nicely priced homes are getting multiple offers, even short sales! The prices are starting to go up, ever so slowly... shall I say slower than snail pace in going up.

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