Surge in Foreclosures

WHAT’S CAUSING THE SURGE AND WHAT ABOUT ALL THOSE FORECLOSURES?... The surge is caused plain and simple by buyer demand. Right now, if a home is properly priced for its condition, it will sell. Because of incredibly bad publicity, buyers have sat and sat and sat on the sidelines. Many of them can wait no longer to buy. AND THEY SHOULDN’T WAIT ANY LONGER. RIGHT NOW IS A GREAT TIME TO BUY PROPERTY! That’s not to say it couldn’t get even better in terms of prices declining, but the unknown quotient there is interest rates. Right now, we know that interest rates are great. We know the Fed has been very proactive in trying to guard the market from a true crash and all indications are it will continue to do so.

Right now is the best inventory. As this buyer cycle peaks, less desirable property will be available and in less quantity. According to Dataquick Information Services we so far have seen a 12.9% median price drop in LA county, 16.1% drop in Orange county (bringing it back to 2004 levels), and 21% down in the Inland Empire. Some buyers are targeting foreclosures, looking for that great deal. There are some deals out there, but you may also find yourself in a multiple offer situation because if it’s a deal, others will sniff it out as well. The big difference to this market, compared to the blow out of the 90’s is that this time around, people have jobs. We lost almost 1,000,000 jobs in the 90’s. This market is nothing like that. This time we have people waiting for the affordability index to rise so they can buy a home. BIG DIFFERENCE! When the housing market peaked, the affordability index was 11%. Today it is 32%. BIG DIFFERENCE!