Why did foreclosures in CA peak in 1996 ?

[gn]

I’d like to ask the experts at Piggington the following.

From what I remember, in 1994/1995 the US in general & California had recovered nicely from the recession in the early 1990s. In 1996, the press predicted that Clinton would easily win the 1996 election (and it was right).

I know that foreclosures is a lagging factor, but why did it lag so much ? I mean, the recession ended in 1993, why did it take 3 years for the foreclosure number to peak ?

http://www.reuters.com/article/bondsNews/idUSN2256432120080123

http://articles.latimes.com/2007/jul/25/business/fi-housing25

[sdrealtor]

To get to the other side?

[sdrealtor]

To get to the other side?

[sdrealtor]

To get to the other side?

[sdrealtor]

To get to the other side?

[sdrealtor]

To get to the other side?

[peterb]

I believe 1993 was the peak of the recession as unemployment got the highest then. Recovery slowly took hold moving forward. 1990 prices did not get to par until 1997.
As for the LA Times article, check Bruce Norris’s web site for his radio show. He’s a long time Riverside County RE investor and he and others in his area think this is far more severe than the early 1990’s.

[peterb]

I believe 1993 was the peak of the recession as unemployment got the highest then. Recovery slowly took hold moving forward. 1990 prices did not get to par until 1997.
As for the LA Times article, check Bruce Norris’s web site for his radio show. He’s a long time Riverside County RE investor and he and others in his area think this is far more severe than the early 1990’s.

[peterb]

I believe 1993 was the peak of the recession as unemployment got the highest then. Recovery slowly took hold moving forward. 1990 prices did not get to par until 1997.
As for the LA Times article, check Bruce Norris’s web site for his radio show. He’s a long time Riverside County RE investor and he and others in his area think this is far more severe than the early 1990’s.

[peterb]

I believe 1993 was the peak of the recession as unemployment got the highest then. Recovery slowly took hold moving forward. 1990 prices did not get to par until 1997.
As for the LA Times article, check Bruce Norris’s web site for his radio show. He’s a long time Riverside County RE investor and he and others in his area think this is far more severe than the early 1990’s.

[peterb]

I believe 1993 was the peak of the recession as unemployment got the highest then. Recovery slowly took hold moving forward. 1990 prices did not get to par until 1997.
As for the LA Times article, check Bruce Norris’s web site for his radio show. He’s a long time Riverside County RE investor and he and others in his area think this is far more severe than the early 1990’s.

[(former)FormerSanDiegan]

It’s the price.

The only real reason for foreclosure is being upside down. The reason is that if one was not upside down (after selling costs) they could sell their home and not suffer the credit hit from foreclosure. (There are exceptions, but this is by a wide margin the only important reason for sane people).

Once price declines end and there is slight upward movement people have the option to sell rather than be foreclosed on. The pricing bottom (in terms of nominal pricing) occurred in ~ Dec 1995 – Jan 1996. Many people were still upside down at this point.

When prices started creeping up in spring 1996 the foreclosure pace naturally declined since some folks were moving closer to break even (less underwater).

That is why foreclosures peaked at the bottom in pricing.

[(former)FormerSanDiegan]

It’s the price.

The only real reason for foreclosure is being upside down. The reason is that if one was not upside down (after selling costs) they could sell their home and not suffer the credit hit from foreclosure. (There are exceptions, but this is by a wide margin the only important reason for sane people).

Once price declines end and there is slight upward movement people have the option to sell rather than be foreclosed on. The pricing bottom (in terms of nominal pricing) occurred in ~ Dec 1995 – Jan 1996. Many people were still upside down at this point.

When prices started creeping up in spring 1996 the foreclosure pace naturally declined since some folks were moving closer to break even (less underwater).

That is why foreclosures peaked at the bottom in pricing.

[(former)FormerSanDiegan]

It’s the price.

The only real reason for foreclosure is being upside down. The reason is that if one was not upside down (after selling costs) they could sell their home and not suffer the credit hit from foreclosure. (There are exceptions, but this is by a wide margin the only important reason for sane people).

Once price declines end and there is slight upward movement people have the option to sell rather than be foreclosed on. The pricing bottom (in terms of nominal pricing) occurred in ~ Dec 1995 – Jan 1996. Many people were still upside down at this point.

When prices started creeping up in spring 1996 the foreclosure pace naturally declined since some folks were moving closer to break even (less underwater).

That is why foreclosures peaked at the bottom in pricing.

[(former)FormerSanDiegan]

It’s the price.

The only real reason for foreclosure is being upside down. The reason is that if one was not upside down (after selling costs) they could sell their home and not suffer the credit hit from foreclosure. (There are exceptions, but this is by a wide margin the only important reason for sane people).

Once price declines end and there is slight upward movement people have the option to sell rather than be foreclosed on. The pricing bottom (in terms of nominal pricing) occurred in ~ Dec 1995 – Jan 1996. Many people were still upside down at this point.

When prices started creeping up in spring 1996 the foreclosure pace naturally declined since some folks were moving closer to break even (less underwater).

That is why foreclosures peaked at the bottom in pricing.

[Author]

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