CA REO's UP 51% in 1 Month

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CA REO's UP 51% in 1 Month

Anyone that thought the REO market had come to a halt in California got their minds slappedhard yesterday when the January foreclosure numbers were released. Recent releases of Robo Sigining and Holiday Moratoriums have been lifted and the flood gates have once again been opened and none of this takes the Alt-A and Option ARM resets mid 2011 which will also be at yet another crisis proportion into account.  

Foreclosure Chart 2011

The above chart from shows the huge jump in REO's which exceeded the 1 month total in more than a year.  BTW the numbers above are in the hundreds of thousands and you need to add a zero to the end of each number so that is over 140,000 in 1-2011. Note also that the number of cancellations which are most often postponed to a later date dropped over 11% from last year.  Guess the HOPE, HAMP, & HAFA gang will not be faring well in 2011 either. This is another reason we see over 400 days from NOD to REO in CA as well.

A recent Case Schiller report, that was recently updated, shows that there is a 49 month backlog of shadow inventory waitiing in the background to clear and another trends report indicated that there had been a drop in value of over 10% in the last 4 months in multiple counties in California including those mid tier and high tier areas that had previously been untouched by this crisis. 

Reality check in Realty boys and girls, we are gonna be in this for many moons in CA.  With the budget crisis, unemployment, underemployment, the rise in interest rates & MIP, the downsizing of Fannie & Freddie, and proposed raises in down payments take a look into your crystal balls and tell me what you think the next 3-5 years will be like trying to sell real estate in Southern California.  It will be a challenge to say the least.

My little tiny town of 30,000 had 38% of all SFR sales in 2010 in REO status and another 10% in Short Sale.  That's 48% of all homes sold.  How's the market in your neck of the woods? Similar? Different? Crazy?  It's gonna be another rocky year for us all. 

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