This afternoon I took a look at the foreclosure and pre-foreclosure information in the San Diego County Assessor's database....the numbers are almost unbelievable!
We hear stories about the "Shadow Inventory" of foreclosures out there...the "Foreclosure Tsunami" waiting to break...unfortunately those stories may just be TRUE!
San Diego County is one of the locations you could call "Ground Zero" for foreclosures....and there is no other part of this town that is any harder hit than the Escondido area...and my home town...Valley Center...so I picked these zip codes to illustrate how things are changing in a hard-hit area.
These Charts are my own research...straight from the Assessor's database...I pulled all of these numbers today...to calculate the monthly sales volume for each zip code I took the past three months worth of sold data for all housing types...and divided by three...pretty tricky eh?
Now...you have to promise me something...promise you will READ the comments below the charts...they are IMPORTANT...but won't make sense without the chart data.
First...here is a comparison of homes in each local zip code that are in some stage of the foreclosure process...Escondido has four zip codes, 92025 through 92029...Valley Center is 92082:
The sheer number of present and upcoming foreclosures is staggering...More than 90% of these homes are going to hit the resale market...with a HUGE impact.
Let's look at that in the context of the number of sales in an average month here...I took the past three months of sales and averaged that to a single-month average number of sales...and compared this "Shadow Inventory" to the present sales:
These Foreclosed or "about to be Foreclosed" homes represent on average OVER A YEAR of sales inventory!
Ask yourselves two questions:
- Do we think that unemployment is going to increase the number of foreclosures?
- How deep is the "Pool of Buyers" for these homes?
In the North San Diego County area we're seeing over a 1% per month price appreciation for the average home...many first time buyers were again priced out of the market this fall
This data shows me that we should have downward pressure on prices at some point...and those folks need to be ready to STRIKE when the prices drop! It won't happen a third time!
The elimination of Federal Mark-toMarket rules have allowed banks to hold LOTS of homes off the market...but how long can they keep that up?:
a.) Six more months
b.) Eight more months
c.) Twelve more months
d.) For Ever
If I get to grade this little test there will be no points given for "d" as the correct answer....
Just like the earlier bubble...what goes up will come down...right now bank inventories are up...OK...for now...but the savvy buyers will be READY when the inventories start to come down!
Hope this was helpful...if you ever have questions or referrals for Escondido or Valley Center I'm here to serve you!
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