Yesterday, the Press Democrat had a front-page article on foreclosures in Sonoma County in the third quarter. They beat me to the story. Not that surprising since they get paid to write on this stuff, while I apparently do this for hate mail from Realtors and threats from people trying to sell their million dollar estates. Go figure.
Nonetheless, I'm updating our quarterly graph to the right. It's visible that the number of people falling behind on their mortgages has returned to near all time highs. However, actual foreclosures are far lower than their peak last year. If we're to believe executives at BofA this was due to trying to figure out who was eligible for the HAMP program. Foreclosures should resume in the next 3 months:
But the number of foreclosures is expected to increase in the fourth quarter as mortgage-servicing companies determine who is eligible for a loan modification and who isn't. "We are going to see a spike from now to the end of the year in foreclosures as we take people out of the running" for a loan modification or other alternatives, says a Bank of America Corp. spokeswoman. Foreclosure sales had dropped to "abnormally low" levels in response to government efforts to stem foreclosures, she adds.
According to the numbers, since the beginning of 2007, there are over 6000 people in Sonoma County who have been seriously delinquent on their mortgage but not yet foreclosed on. Does this mean the loan modifications are working? Simply put no.
The latest figures now show that cure rates on prime mortgages have fallen to 6.6% from over 45%. For Subprime and Alt-A the numbers are worse. For Realtors and others that are math impaired when it comes to bad news for home prices that means we could be facing more than 5600 foreclosures, a number that is growing every month.So in summary, the number of people falling behind on their mortgages in Sonoma County continues at all time highs and more foreclosures by banks are coming. This can only lead to further price declines, especially at the higher-end of the market. And did I mention we're entering the winter months that are seasonally slow for real estate sales? Clearly, this is horrible news if you're looking to sell your home in Sonoma County or you're a taxpayer that will be bailing these sellers out.
6 comments:
Why do you HATE AMERICA! THINK OF THE CHILDREN!! How are brokers and rich people going to afford those trips to Bangkok if prices keep dropping? Those young Thais DEPEND on the money they recieve from generous and loving Americans.If you don't have a POSITIVE attitude your pony will stop pooping skittles!!!
I love Healdsburg! It will recover, just like all great places to live in America.
Depends what you mean by "recover". If you bought a house in the 2005-2006 time period you will never get your money back Unless you are fortunate enough to live into the second half of this century.
Please. I'd give it 10 years.
I would not be surprised to see a small condo in Healdsburg sell for $1mm dollars in 10 years...or $50k.It is not predictable,although I do think hyperinflation is the most likely outcome.So $1mm for the condo,$100 a gallon gas.
TS: Agree... totally unpredictable. Recently I spoke with the Chief Economist for Fannie Mae after he did an evening presentation in the South Bay... and asked HIM "when is the SFR market going to bottom, then recover". HE said that he "coudn't say". Incredulous I asked why? He said "there are too many factors, many government influenced, for ANYONE to know with certainty". Essentially, that it is all very "manipulated" at the top, and there are too many cooks in the kitchen. He DID imply that we are looking at serious inflation (10%+ annually beginning 2015-16 for a decade, with this being the ONLY way the US Govt. can pay back the ballooning deficit, and meet the Baby Boom generation's entitlement programs (SS, and Medicare). My prediction: In 10 years the condo 2/2, good location, walk to downtown: $850K, gallon of gas: $8.50. The gas-hikes are going to be the KILLER.
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