Southern California - There have been many articles written about the foreclosure avalanche that was supposed to happen this fall; including mine which I penned in October 2009. I am a student of the market and listen carefully to bank professionals and loss mitigation personnel when I am negotiating directly with them. I was assured by more than one of them that there was an avalanche of foreclosures that were going to hit the market before the end of the year. I passed that information on to the buyers I am working with.
Here we are; at the end of the year and there has not been a Foreclosure Avalanche here or anywhere else in the nation that I am aware of. I stand by my conversations with insiders in the industry and I think they genuinely believed they were giving me valid information. That means, we just need to be patient. The foreclosures are coming.
Theories that the government is holding onto foreclosures in an effort to control the housing market ring of conspiracy theory to me and I cannot give them any merit. A government that encourages their citizens to take advantage of homebuyer tax credits and remarkable interest rates is not going to secretly hold onto non-performing assets in an effort to control home prices. It doesn't make an ounce of sense - even for a government reknowned for paying $300 for a hammer, it doesn't make sense. Besides, do you see hundreds of vacant homes cluttering up neighborhoods? No. Neither do I.
Nothing has changed. The banks are still trying to catch up with their non-performing assets. How many stories have you seen or heard where someone is living in a home they haven't made a payment on in a year? Yeah, more than one...right? Me too.
The banks will catch up, the Notices of Default (NOD) will happen, short sale listings will continue to dominate the inventory and foreclosures will start happening. We are still going to see a surge in the foreclosure industry. We're just waiting on the banks to act on their non-performing assets.
Take control of the situation. Have your buyers pre-approved, through underwriting, so they are ready to make a strong offer when the time comes. There is still stock market money out there being put into real estate, but I see that mostly in the under $250,000 price range. Once you get over that, first-time buyers and move-up buyers seem to have a clear advantage over investors in our market.
This is not time to seat on the fence and you certainly should not be leaning against the fence agreeing with conspiracy theorists. The inventory is going to swell. Will you ride the wave or be crushed by it?