Real Estate Blog - Foreclosures Continue Rising in California and Florida and Not Just on High Risk Mortgages !

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Foreclosures Continue Rising in California and Florida and Not Just on High Risk Mortgages !

Currently all across America , about 1 in 11 homeowners are now in trouble with their mortgage. A recent report from the Mortgage Bankers Association says that all told, 8.1% of all home loans are now either past due or in foreclosure. That represents over 4.8 million homeowners. That is not a very encouraging report considering the nice up tick in market activity we are seeing in our San Diego real estate market.

Before 2006, foreclosures were at historic lows. But since Jan 2006 through to today, foreclosures have been picking up speed in every quarter since then. Nine quarters of increasing large numbers of foreclosures. With further erosion of the economy, as it continues to weaken now coupled with lower home mortgage values, even homeowners with better loans are also beginning to fall behind. That is scary and something we need to get a fast handle on.

It was also reported today that the national unemployment rate rose to 5.5% and with the loss of jobs increasing, things are looking to be improving way more slowly than even many of the most pessimistic economists had projected.

California and Florida account for one third of all the increasing foreclosures or those that are at least 90 days delinquent. Falling home prices have contributed greatly to the problem especially here in our San Diego market. The Midwest has also suffered with its loss of jobs in manufacturing. In other areas, they to are also touched because the cost of living increases have been far exceeding their more stagnant incomes. Take all this together and the picture it paints is getting more and more difficult to get our arms around.

While I remain hopeful and the forever optimist, I am confident that we will eventually get through this.

But i have to face the news that just keeps getting worse and it's like a piling on affect of more bad news on top of bad news every day. It gets a bit much to always be telling my clients that things are going to get better, that in fact things are looking up and then looking down at their newspaper headlines and seeing the barrage of reports of just the opposite. They must wonder sometimes, " what is he smoking".

And as just an editorial, I suspect strongly that there are great political incentives to keep this all fired up and all this bad news coming. We shall see.

Courtesy of William Johnson GRI CRS e-PRO author of The Real Estate Text Book and The Voice of San Diego Real Estate

Posted by San Diego Real Estate Voice authored by William Johnson on 06/07/2008 10:22 PM

Comments (17)

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17 Comments on Foreclosures Continue Rising in California and Florida and Not Just on High Risk Mortgages !

JUN

2008

William - there is hope, agents just need the education to deal with this market, take a look at www.1cdpe.com for info on our educational programs.

Alex

Hello Alex and Cadey, I looked at your site and found it interesting. I will look into this further and see if this a training program that is something I would be interested in. Thanks for the link but remember, it is not appropriate to post your links in comments. In this case I am ok with it but others could possibly object.

It looks like FL and CA are going to lead the depreciators for a long time.

Those numbers are certainly concerning, William. It would seem to help a bit if the banks could get their act together and get some of these things sold that buyers are trying to buy.

And my haven't you been busy posting!

Jeff

Hi William,

Interesting numbers. I guess I'm a bit more optomistic (sp? my spell checker is not working). While no doubt this is a difficult time for too many folks, yet there is opportunity for others. I.E. first time home buyers, the affordability index is greater than we've seen for a while. I recently had a single mom with 2 little boys who just closed on a home. Her lender called and wanted to know what the hoa dues were. I said, "it's an individual home, not a condo", she couldm't believe it for the price. She got a big back yard for a condo price. My buyer was also able to use several different grant programs, and I'm just thrilled for her.

I also had another buyer (a disabled person) who purchased a repo for herself. Her new house payment was actually lower than the increased rent for her 2-bedroom apartment. Then I had a couple who had been renting for 20 years (16 in the same place), they closed about 2 months ago in their very first home, 3 bedrooms/2 baths. More than either of them ever lived in before.

It seems to me if we re-think home ownership for the overall long-term benefits it would make more sense. I guess time will tell.

"And as just an editorial, I suspect strongly that there are great political incentives to keep this all fired up and all this bad news coming. We shall see."

That's the sad part William, because I believe you are right on that one. As Mr. Dowler said, the numbers are concerning, yet there is a way out of this ... there always has been.

JUN

2008

The problem is that there is no simple solution. The interest rates are low. There is a pervading fear of the housing prices and the economy in general.

I wish there was an easy way out.

All the best!

Our area has yet to see a substantial reduction in housing prices. This either means we are going to stagnate forever, or the prices are going to start coming around. Either way, the economy is NOT GOOD. PERIOD. Too many hard-working Americans have seen wages stagnate. There is a price to pay for worshiping the business man over the working man...Eventually the big fish eat the small fish until there are no fish left.

William- I do not watch the local or national news on this sort of thing. Negatives are not invited. The small increase in unemployment? Heck, that is still a historic low. Foreclosures looming, yes, but that is a part of the market correcting itself and we will come out of this too if we allow the free market to take its course and don't bail everyone out. I love living in a country where no matter where you are, where you come from or how bad you have fallen that you can pick yourself back up and start anew. You can build a business here, you can be whatever you desire to be if you are willing to work for it. In all the other countries this is not the case. IN most countries, if you are born poor, you will remain and die poor. Only in America people can come here and work 3 jobs, save their money then start a business of their dreams! I am passionate about protecting this last financial capitalist frontier of the free will of the mind of man to become all that he dreams of being.

Hello Heath, I am afraid you may be right on that one. Certainly not a category to want to be the leader in, however. Thanks for stopping by. Appreciate the comment

Hi Jeff, Wouldn't you think? There are so many offers out there and a good portion are ties up while the lenders and agents play around with them. If you are countering, then counter the darn thing and lets gets on with it. No one is well served with these long lag times.

I have worked on so many posts and haven't had the time to edit nor to get them organized. I can't remember a time when I had so many posts either started and not finished, not edited or just just left to sit on my draft shelf.

I canceled 4 out as no longer timely. I posted 5 and the the Video of the Belmont which I planned to try to do after first testing the TV and found it to produce reasonable quality for the Video. These made up for a whole week of indecision of not posting. I would have to beg for indulgence, it is not my usual style to load up but , it is either post or dump them. I decided to post. I have nearly double that number to finish still.

Hi Lynda, I have experienced those same sorts of things happening in our market. I have been feeling like things are getting better. Then you see these numbers and you begin to get the point that so many people are upside down in their values vrs their mortgage. There is not a lot of incentive for them not to remain in their homes. They either do short sales or go the bankruptcy route or foreclosure.

This is not all tragedy and gloom sort of stuff. It is clearing out. In one part of our county over 80% of a large number of listings are short sale. Many REO's as well. A large percentage are vacant and basically striped out. This is not everyone having a hard time paying, they see the writing on the wall and know it will take too many years before there values and their mortgages align.

It wasn't their fault that the builder dumped so many homes that the values dropped and coupled with the large number forfeiting, the whole of our south bay is a real mess. This spreads. Yes there is opportunity for many new buyers but where are all these people going that owned these homes. I doubt if they are all heading to rentals. I think some are leaving the area entirely.

So it is not just sub-prime stuff causing this. That started the ball rolling and with the drop in values, people are just walking away.

And then there is the political motivation and the resultant belief by many others that someone or something is going to step in and absolve them of all the excess debt. That plan and discussion is still not fully approved but it is a giant possibility of getting passed this year in the legislature.

Hi Jason, I sure wish I was wrong but our politics are getting stranger and more bitter every year. Lots of people found a new bitter voice and are exercising it unjustly and for the most part incorrectly, but it is their voice and they determined otherwise. They are also finding huge numbers of each other to support their attitudes.

So sad and so unnecessary. Does make you wonder about the future in 6 months and how much of all this is related.

Nice to see you again, my friend.

Hi William. Yes, the bad news is dominant, and my market reports accentuate the bad news. Let's figure out a cure!

William, we are seeing a ton of foreclosures in Ann Arbor Area too. However, the good news is they are getting gobbled up quickly with multiple offers.

Isn't all of this political ? Even the investors packaging loans help start all this mess. In some area's of the country it is the sub prime mess, most of it for us in Mi, is the loss from Automobile Capital State to still trying to figure out where we go next.

Some area's are saturated and other area's are selling just fine.

Lots of great opportunities for buyers who couldn't afford Ann Arbor before. The market appreciated to fast and now it is correcting itself.

Hi Kevin -I hear you can at least until the other shoe drops your scenario is the best we could hope for

Hello RuthMarie -except for the big fish, which is where we seem to be. Maybe they will spawn- LOL

Hi Nestor and Katerina -your outlook is of course wonderful and it has all the fantastic overtones. What's afoot is not what our dreams and aspirations brought forth. It was pure greed and there seems no cure for that. At least delayed. It left a huge mess to clean up.

Good morning Susie -I'm for that. The problem as I see it is that others won't believe it's a cure. Just more of the same. Of the solutions I have heard, they sound like something from the old Soviet empire. Socialism seems what is being forced here. And as evidence to justify that, those in the lead feel that people don't seem to be able to take care of it themselves. Thinking they can is what creates the problem. But that's definitely wrong thinking.

Hello Missy -while I agree wholeheartedly with you, I think there are other unnatural forces that really want ( for whatever reason ) to see this continue. Hard to believe isn't it.

JUN

2008

Hi William - our pre-existing home sales in the my area are very stagnant..too many new home builders who are practically giving their homes away with great incentives. Great for 1st time home buyers, but terrible for a home seller.

I wonder about the foreclosure numbers..are they actually the foreclosed numbers or pre-forclosures that are cured before they foreclosed upon?

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