I got a chance to chat with Joseph Galascione, the real estate broker who was mentioned in the San Diego Daily Transcript a couple weeks back as having authored what appeared to be an interesting study on local foreclosures.
It turns out that the study in question is freely available at the website of Galascione’s brokerage, ERA® Metro Realty, and that it is very informative after all.
Galascione and his colleagues analyzed county deeds of trust to see how many San Diego home mortgages were going to reset between January and June of 2008. For each of these mortgages, they determined the likely increase or decrease in mortgage payment upon reset. They also calculated the loan-to-value ratio (LTV) at purchase time, this just being the amount of the loan (or loans) on a home divided by the home’s value when the loan was taken out.
Those loans for which the payment was expected to increase by $500 or more and the LTV was greater than 80 percent were categorized as being at "high risk for foreclosure."
Good read Rich! If you chat
Good read Rich! If you chat with Mr. Galascione again, please tell him thanks for the honest and well written report. Good to see from a person in the real estate business.
That’s interesting.
That’s interesting. Although the peak appears to be this April or May for loans resetting, with homes going into foreclure potentially in November or December… what does the trend line show? How many homes are being foreclosed on now and in the past on a month over month basis? How significant is the 2008 activity to be relative to past trends?
Track Legs,
Here’s all the
Track Legs,
Here’s all the info you need in an easily-readable format:
http://www.foreclosureforum.com/stats.html
Here’s the punch line: 2007 was the worst year ever for SD County foreclosures by a wide margin. 2008 will be worse than 2007… by an equally wide margin. The numbers are an absolute nightmare, they continue to get worse, and the light at the end of the tunnel MIGHT be late-2009… unless it’s another oncoming train that is.
I know two people that
I know two people that havent made a payment in at least 4 months and have not received an NOD yet. The banks are buried and have more than they can handle or they are hoping for a miracle.
Thanks for the stat website.
Thanks for the stat website. It was interesting to see the foreclosures in the mid 90’s. Those were tough times for real estate. No surprise that there were many foreclosures. I remember trying to sell my place in ’93 w/no offers. Ended up taking it off the market until years later. Seems the market now is very similar. I’ve seen houses on the market for over a year. I think the economy is suffering more now than back in the 90’s. So glad to be on this side of the fence, looking to buy than trying to sell.
Yep. Informative data set
Yep. Informative data set and comments on that link. The comment that stood out most for me was the statement that the best shopping for foreclosures tracks the NOD to trustees sale ratio. In the best buying years of the 90’s it was 2:1. I think we are close to that now but it doesn’t seem like we are at the best buying years yet, relative to fundamentals. In the 90’s the fundamentals were there on many properties when nod to trustees sales were at this level.I bought two places that rented well in the positive from day one with 3% and 0% down.
The subject of the link
The subject of the link below portends far greater adverse consequences to come than anything else I’ve seen, if it catches on.
Lenders freeze equity lines in response to tumbling property values.
Weird, more people that feel
Weird, more people that feel entitled to money that isn’t their’s in the first place. I guess the question is, if children stopped getting an allowance for playing video games all week, would the local candy shop go out of business? Probably, but not without a lot of crying and pouting.
1+1=3?
Okay, am I missing
1+1=3?
Okay, am I missing something? Or did we already bypass peak adjustments? According the research, we are peaking at 1800 or so adjustments a month, in December we already exceed 1200 foreclosures a month.
My initial thought at seeing 8052 adjustments for the first half of the year was, ‘is that all?’
Agreed. There were 13,069
Agreed. There were 13,069 defaults in the last 6 months of 2007, which I would guess is less than the # of resets that led to those. Are there thousands of people defaulting on traditional loans or something?
I found the section analyzing the “high end” of downtown a little misleading. Isolate units above 500k. Ok, now the median rose from 650k to 705k while inventory decreased from 605 to 438. Could it be that units in the range 500-550k fell out of the search due to being reduced? Would this cause the median to climb despite falling prices? hmmm.
I also like that they cite the inventory from june 06 to 07 (605 to 438) and the price from nov 05 to nov 07 (650k to 705k). Why not cite the price from June 06 to June 07? O, it fell from 800k to 662.5k, better cite a timeframe that looks better.
In general I appreciate the report, but this kind of analysis leaves me wondering if other data has been subjectively chosen and for what reason.
To be fair, I don’t think
To be fair, I don’t think Rich or the report claim that the peak is coming, but simply that more are on the way.
Makes Sense to ME…
“As
Makes Sense to ME…
“As Bank of America (BAC) CEO Kenneth Lewis noted recently, “There’s been a change in social attitudes toward default.” People are walking away from their homes but keeping their credit cards and auto loans.”
When they’ll buy food w/ credit and LIVE in their cars…
ciao for now…