Tuesday, April 22, 2008

Sacramento Area Foreclosures Hit New Highs

From the Sacramento Bee:

Banks repossessed nearly 5,300 homes in the capital region during the first three months of 2008, setting a record and pushing the region's foreclosure tally to more than 15,300 since the beginning of 2007....The number of home loan defaults also neared 10,000 during the quarter in Amador, Nevada, El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to La Jolla-based DataQuick Information Systems.

Those defaults...hint at thousand more foreclosures in months to come. Altogether, the region has now seen about 34,000 home loan defaults since January 2007, according to DataQuick.
From DQNews:
Last quarter's default numbers were a record in almost all of the state's 58 counties.
...
Foreclosure resales have emerged as a significant market factor, accounting for 33.1 percent of all California resale activity last quarter. A year ago it was 3.2 percent. Foreclosure resales vary significantly by area, from 5.1 percent in San Francisco County to 66.7 percent in San Joaquin County.
...
Of the homeowners in default, an estimated 32 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 52 percent.
...
"The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the 'loans-gone-wild' activity happened in late 2005 and 2006 and that's working its way through the system. The big 'if' right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans," said Marshall Prentice, DataQuick's president.

From Downey Financial:
Downey Financial Corp. reported a net loss for first quarter 2008 of $247.7 million or $8.89 per share on a diluted basis, compared to net income of $42.9 million or $1.54 per share in the year-ago first quarter...At March 31, 2008, the allowance for credit losses was $547.7 million....The allowance increased $198.4 million this quarter....The balance of the increase to the allowance reflects further declines in the value of underlying home collateral as well as further increases in delinquent loans. This has been particularly true in certain geographic areas such as the greater Sacramento, Stockton, Modesto and Contra Costa areas of Northern California, the Inland Empire and San Diego County.
From the Stoctkon Record:
Greg Paquin, president of the Gregory Group, said that although sales and prices have basically bottomed out in the Sacramento metropolitan area, San Joaquin County might not be there quite yet. Foreclosures need to be cleared out of the home sales market first, he said.
...
In the first quarter of this year, 364 new houses were sold, 56.6 percent from the first quarter of 2007...according to the Gregory Group....

19 comments:

smf said...

"Altogether, the region has now seen about 34,000 home loan defaults since January 2007, according to DataQuick."

Yet we don't have nearly 34,000 homes for sale...hmmm...

Is there some sort of 'phantom inventory' out there?

Deflationary Jane said...

Think that is a cumulative number. The question is have sold 34000 since 01/07?

smf said...

That's certainly framed better than my question.

Who wants to take a bet that 34,000 homes have not sold since Jan 2007?

siflsockpuppet said...

Isn't a Notice of Default (NOD) the first step in the foreclosure process? If so, 34,000 defaults does not equal 34,000 REOs and short sales. Even though the majority of NODs are not made current, there is still a decent percentage of that number whose owners make good on the delinquent amounts.

I'm not trying to sound like the RE market is improving. As a renter, I hope it continues its downward trend for at least another year... But there seems to be some misunderstanding, either by me or others. Please feel free to correct me if I'm wrong.

Jacob said...

The big 'if' right now is whether or not the economy is in recession

This is stil an If? lol

Walk into a Home Depot to see if we are in a recession.

sales and prices have basically bottomed out in the Sacramento metropolitan area

Hmm, so prices have leveled off and are holding at the bottom? Each month they are lower, so maybe we are using different definitions of "bottom"

Jacob said...

Looks like 34000 NODs to me, and 32% of those on average may be brought current.

Still 20k or so foreclosures for the year, 5k per month, seems like a lot, and certainly a lot more than total sales.

Perfect Storm said...

Basically there is a shxx load of REO's and a lot are not on the market. Financing is getting tough to get with exception of the most able borrowers.

We are a long way from bottom.

Were right on track for a 50% decline by 2009.

Sippn said...

Perspective

5300 homes foreclosed on

6200 REO homes resold or put into escrow since 1/1/8

the ratio of NODs to actual foreclosed homes is about 5:1 in CA ..... numorous notices per house, and as they said, some are bought current also. THe combination of the 2 items, drops it to 5:1. Data quick published the number last year.



Had a really strange comment from a very experienced broker/investor today that a home he was under contract to purchase from a bank (REO) in a cash transaction, the bank was delaying the close 30-45 days! (my guess is the bank didn't want to show the loss until next quarter!)

Tuesday, April 22, 2008 8:51:00 PM

BTW, DJ, that stuff BMIT was arguing with the agent about is apples vs oranges.... she's talking pendings ("sales") BMIT is talking closings ("sales") about a 45-60 day difference is why they see different things.

and yes, (reading your comments in the Bee) the REO pendings are a collection of several months, which is typical.

Sippn said...

My last comments on foreclosures were "since 1/1/8" but if you read it carefully, they say 15300 since 1/1/7, 5300 since 1/1/8, leaving about 10000 foreclosures in 2007.



On Stockton, see if anybody has access to pending data there. Hearing its very strong below $200K now. Paquin's data is now old.



AKA Gwynster.... check out AB's # months list from earlier today. It verifies the activity.... especially surprising is the number of zip codes dropping below 6 months inventory that I thought were loaded with REOs and short sales.


WHAT, you expecting Whiley Coyote dropping straight down until "splat"??? The severity of the drop will lessen until there is a bottom.

smf said...

Again, sippn, anecdote states that investors (the same that caused the original bubble) are still active...

...buying foreclosed property...

...it still does not address the glut that exists out there.

Till that is addressed, which very few have touched at all, this thing is far, far from over.

Perfect Storm said...

Despite well publicized federal efforts to reach out to homeowners in default, the odds that they will ultimately lose their homes appear to be increasing. DataQuick reports that, of the homeowners in default, "an estimated 32 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe.

So basically for every NOD two out of three will result in foreclosure.

Were right on track for a 50% decline by 2009.

STOP ROSEVILLE CRIME said...

Sippin, please change your name to Spinnin, since you like to spin the bad news. No way around it, the market sucks, just accept it and move on. Your posts really don't make any sense anyway. Perspective

Diggin Deeper said...

Banks are not moving inventory to the market as quickly as they could. If they dumped it all on at one time, they'd cut their throats on pricing. They're trying to walk this market down rather push it over a cliff.

Most of the inventory is sitting in clearing houses that act as a third parties and a marketing arms for the banks.

It makes perfect sense for the lower end to continue to move. That level has caved in to levels that appear reasonable to more people than other price points.

We're watching the median price fall monthly and that should continue, not because the lower end is handing in more losses, rather the higher end pricing is accelerating downward, taking the median with it.

For two years people on this blog have correctly predicted what's happening today. It will be very interesting to see just how far it goes from here.

wrong moves said...

This is just my opinion and I have a very small span of concern and span of control. That being said, I truly believe there are going to be many households let their house go to the bank even though they can perfectly well afford it.

A few folks I talk to are simply banking money, positioning themselves to buy a second house with a traditional 30 yr fixed, and simply let the current, upside down mortgage go back to the bank.

I think to many people, the house is just a business decision. What pisses me off most is that they are going to be compitition for the same type house I'm looking for.

Again, my opinion: The banks may not be counting on more than just the troubled loans going bad.

Jacob said...

Well I am not sure how anyone would get financing to buy a house when they already have one that they are underwater with.

If the banks do that then the fraud that happens is their own fault.

Of course if the person refi'ed the bank may go after them for the remaining debt anyway.

Patient Renter said...

Paquin is on the record again, prices have bottomed in Sac. Wake me next month when this guy is proven wrong, again.

Jacob said...

Well technically they are right. The never said that we reached the final bottom, just another bottom. Every step on the way down is a new bottom.

But we are running out of things to spin. YOY data looks bad, use seaonally adjusted. That looks bad, use MOM. Then when March is higher is sales then Feb, whoo hoo, recovery under way.

But what do they spin for the rest of the year as yea MOM is lower and lower?

wrong moves said...

Jacob,
The point I am trying to make is that these folks can so easily afford their current home that there is money left to save for the (at least) 20% down payment and can get approved for the second house. They simply want to let the upside down house go back to the bank. For them, it is a "business decision". Doesn't seem like there is a stigma with being foreclosed on anymore.

Patient Renter said...

Well technically they are right. The never said that we reached the final bottom, just another bottom.

Wow, that's quite a stretch.

If you choose to not look at the big picture of things, sure, a lot of ridiculous statements are true. Obviously when most people think of a "bottom" though, they mean the absolute lowest bottom for the entire cycle.