This number is as of 10/07/2015 at 0354hrs.
Of all the condos, town homes, single family residences for sale in the Southland – only 250 are distressed.
When a healthy real estate market exists, only 1% of the available real estate inventory is foreclosure, bank owned, or otherwise, distressed.
The distressed inventory reflects the following property types:
- Foreclosure – the general term for real estate that has completed the foreclosure process with the court. Typically involving a real estate owner and the lender who he defaulted against.
- Bank Owned – real estate listings that have experienced the Foreclosure process and are still on the banks books as an REO, Real Estate Owned property.
- Short Sale – aka Pre Foreclosure – This type of real estate can be “hardship” motivated or “strategically” motivated. For both events – the banks are going to want a detailed explanation from the human owner of the property where the default has or will be taking place. Some of these property types have NOD’s filed – notice of defaults and some do not.
- HUD Foreclosure – Foreclosure properties owned by the Department of Housing and Urban Development.
- Auctions – Properties that are going to be sold at an auction event and not on the “MLS” resale market.
The 250 real estate listings in southern California, that are distressed in nature, are either Foreclosures or Short Sales.
By the numbers, with 15384 real estate listings active and for sale – 1% would be in the neighborhood of 150 distressed real estate listings, we are not there yet, but we are getting close.
One of the questions we get is about the market and how the future is going to stack up related to distressed inventory.
We also get asked about the, “shadow inventory”, that is rumored about like the great “Yeti”.
Let me give our opinion in backwards form. The shadow inventory was housing that was primarily bank owned. These were the Excess REO inventory that had no “immediate status”. The banks could not dispo this inventory, fast enough, due to the overwhelming amount.
The banks had their people, chopping away, and eventually the “shadow inventory” shrunk to manageable levels, then went the way of bulk sale, foreclosure sales and auctions.
In a healthy real estate market, where there are no “clever” nor “fancy” lending practices, but has stable inventory, and a somewhat healthy economy, the market will continue slightly better than flat in the future.
The last fall of the real estate market was due to “funny lending” and the issues created when people were allowed to over finance, way above their means.
In addition, within those “clever lending circles”, some of the financing had “trigger mechanisms”, that owners did not remember/know, that caused those home owners to be forced into a refinance or a loan modification.
Those types of programs don’t exist today. In fact, it’s only now – 8 years after the beginning of the last Foreclosure Cycle, that we are seeing ARM’s making a come back. ARM – Adjustable Rate Mortgages.
They are not popular yet- but the banks and credit unions are pushing hard to sell them… However, that being the case, we are far away from a “here we go again” scenario.
In the Santa Clarita Valley cities, we currently have 24 total Foreclosures / Bank Owned real estate listings currently in some stage of “availability”.
They are either in back up offer status, pending or active for sale.
Of the other distressed type of currently available real estate in Santa Clarita Valley, we have 123 that are classified as short sales. (pre foreclosures).
They too are in some semblance of Escrow or Active on the market for sale.
We include inventory that is “in process” as part of the real estate search we conduct for each of our real estate clients.
We don’t waver from the intel approach to real estate search and never set and forget any client.
Be safe – please contact us when you are ready for our Representation of your Real estate needs. I’m Connor MacIvor with REMAX and I’m glad to be of service!