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View Full Version : Housing Bubble: California Foreclosures Reach $2.8 billion in May



FRED
06-11-07, 04:59 PM
http://www.itulip.com/images/CAreturned.gif In case you are wondering how iTulip resident real estate expert Sean O'Toole is doing with his new company ForeclosureRadar.com (http://www.ForeclosureRadar.com), the answer is: very well. Sean gave us some time out of his busy day running his start-up today to update us on foreclosure activity in California, using data available only via FR's proprietary service.

The loan value of foreclosed homes returned to lender at auction, the measure of foreclosure activity that we have been tracking with FR since September 2006, increased from $420 million per month in September 2006 to over $2 billion in March 2007. After leveling off in April at just above $2 billion per month, it picked up again in May, reaching $2.8 billion. Foreclosure activity is accelerating, not "leveling off" as some in the real estate industry have reported. More than $12 billion in loan value in total has been returned over the past ten months.

How does this look pictorially? As a non-subscriber you can see up to 20 properties in a FR search. As a subscriber, you see them all. As subscribers, we did a search for all foreclosures within five miles of Golden Gate Park to get an idea of how many foreclosures there are in an area where foreclosure activity is light–the results, below.










http://www.itulip.com/images/frSanFran.jpg (http://www.itulip.com/images/frSanFranL.jpg)
Click to Enlarge

Above are 200 of 371 results from the search. Green indicates homes in pre-foreclosure, blue at auction, red bank owned, updated daily.

Given a booming northern CA economy, these results surprised us. We would have expected less foreclosure activity based on our prediction of only modest housing market pain in markets where employment remained strong.

Our outside-in market contraction model (http://www.itulip.com/housingpriceregionscascade.htm) anticipates a higher rate of housing market contraction in outlying areas away from major cities before housing markets contract in populated areas. How about an area where foreclosure activity is heavy, such as Bakersfield, CA?


http://www.itulip.com/images/FRbaker.jpg (http://www.itulip.com/images/FRbakerL.jpg)
Click to Enlarge

As you can see, there are 1162 properties in foreclosure within a 5 mile radius of downtown Bakersfield, more than three times as many as within a five mile radius of Golden Gate Park. A sampling of several areas far from populated areas confirms our theory that these will tend to see price declines first.

Lack of access to accurate data can lead to mis-reporting, such as this:

Foreclosure Activity Dips 1 Percent in April According to RealtyTrac(TM) U.S. Foreclosure Market Report (http://sev.prnewswire.com/banking-financial-services/20070515/LATU03715052007-1.html)

IRVINE, Calif., May 15 /PRNewswire/ -- RealtyTrac(R) (http://www.realtytrac.com/), the leading online marketplace for foreclosure properties, today released its April 2007 U.S. Foreclosure Market Report, which shows a total of 147,708 foreclosure filings -- default notices, auction sale notices and bank repossessions -- were reported during the month, down about 1 percent from the previous month but up 62 percent from April 2006. The report also shows a national foreclosure rate of one foreclosure filing for every 783 U.S. households during the month.

"After hitting a two-year high in March, U.S. foreclosure activity slipped slightly lower in April," said James J. Saccacio, chief executive officer of RealtyTrac. "Last year foreclosure activity subsided somewhat during the spring and summer months, thanks in part to increased interest from buyers. Whether the decrease in April is the beginning of a similar trend this year remains to be seen, but we expect foreclosure activity to at least stay above last year's levels for the remainder of 2007, fueled by a combustible mix of risky loans taken out in the last few years -- many in the subprime market -- and slowing home price appreciation."To see how FR works, watch our video here (http://www.youtube.com/watch?v=sqZMwaksiQw).


<embed src="http://www.metacafe.com/fplayer/642716/housing_market_crashing_yes_in_slow_motion.swf" width="400" height="345" wmode="transparent" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash"></embed>
And now for some housing bubble crash porn...

bill
06-11-07, 05:54 PM
http://www.pe.com/localnews/inland/stories/PE_News_Local_S_rally20.9e7f42.html
10:00 PM PDT on Saturday, May 19, 2007


By LESLIE BERKMAN
The Press-Enterprise

Families stood shoulder to shoulder at a busy Temecula intersection Saturday to warn passersby that they are facing financial ruin because of an ongoing investment mortgage scheme and to call for authorities to shut down and arrest the culprits.
"We want them put out of business," said Mory Simmons, a 63-year-old insurance agent from San Diego. Simmons, like most of the approximately 40 people at the rally, said they have homes in foreclosure because investment counselors persuaded them to take on far more mortgage debt than they can afford to pay.
Parents and children who gathered at a corner of The Promenade mall wore bright orange T-shirts and carried placards decrying their plight and blaming organizations and individuals against whom they have filed lawsuits in federal and state courts.

<!-- Image starts here -->Story continues below


http://www.pe.com/imagesdaily/2007/05-20/rally20aerc_400.jpg
Ed Crisostomo / The Press-Enterprise




Karl Kunze and his daughter Paige, 3, on Saturday join others at a rally in Temecula that criticizes an investment mortgage arrangement.


Blame game in full force.



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http://sandiego.craigslist.org/rfs/348937552.html

$535900 Open House,Bank owned Foreclosure$$$$$$$$$$$$$ave
Date: 2007-06-10, 8:11AM PDT
Open this sunday June 10,2007 12:00 - 5:00 pm
Four bedrooms,two and one half bathrooms, 2291 Sq. Ft. built in 2004.
At this price! This is an opportunity of a life time.
Come and see it for yourself. Previous owner paid $710,000 in June of 2004.


How would you feel living in this subdivision after paying 710K in 2004 or higher in 2005 and have the bank price a home next door at 535K?
SICK and FOOLISH
Options, stay and pay or walk.

itulipfan
06-11-07, 06:19 PM
http://www.pe.com/localnews/inland/stories/PE_News_Local_S_rally20.9e7f42.html
10:00 PM PDT on Saturday, May 19, 2007

http://www.pe.com/imagesdaily/2007/05-20/rally20aerc_400.jpg
Ed Crisostomo / The Press-Enterprise




Karl Kunze and his daughter Paige, 3, on Saturday join others at a rally in Temecula that criticizes an investment mortgage arrangement.


Blame game in full force.



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http://sandiego.craigslist.org/rfs/348937552.html

$535900 Open House,Bank owned Foreclosure$$$$$$$$$$$$$ave
Date: 2007-06-10, 8:11AM PDT
Open this sunday June 10,2007 12:00 - 5:00 pm
Four bedrooms,two and one half bathrooms, 2291 Sq. Ft. built in 2004.
At this price! This is an opportunity of a life time.
Come and see it for yourself. Previous owner paid $710,000 in June of 2004.


How would you feel living in this subdivision after paying 710K in 2004 or higher in 2005 and have the bank price a home next door at 535K?
SICK and FOOLISH
Options, stay and pay or walk.

Geez, I feel bad for these folks but investing in "real estate, stock and Iraqi currency"?

At this point in the cycle, the banks start to become their own worst enemy, driving down prices with low priced sales.

Tet
06-11-07, 06:46 PM
Geez, I feel bad for these folks but investing in "real estate, stock and Iraqi currency"?

At this point in the cycle, the banks start to become their own worst enemy, driving down prices with low priced sales.

This was a Ponzi scam not a foreclosure scam.
More from the article at the link.
wiped out their savings in a vain effort to keep up $40,000-a-month payments on their mortgages. He said the eight houses they bought as investments and their family home in Temecula are in foreclosure


$40K per month in mortagage payments is a lot even without a bubble, about $6mm in property, probably all with no money down. I'm not sure but I think this group was spinning the same house over and over.

bill
06-12-07, 10:24 AM
http://www.signonsandiego.com/news/business/20070612-9999-1b12housing.html

“At a minimum it will slow any recovery,” said Nicolas P. Retsinas, director of Harvard's Joint Center for Housing Studies, which issued the report. “Add to that the overbuilding and the inventory correction and you can see why it appears, particularly for the new-home market, that this slump will last well into 2008.”



I thought they already said we hit bottom. HA HA what a joke

In 2008 they will say the impact of all these resets has caused more foreclosures then we expected and the market looks like a recovery will come sometime in 2009.

In 2009 they will say looks like the market is recovering from the massive foreclosures in 2008 and apartment rents are doing great from all the foreclosed and evicted previous home owners.

In 2010 they will say the housing inventory being sold at auctions seems to have little interested but the recovery upside looks great.

In 2011 they will say taking advantage of the new foreign investor program initiated by the president foreigners find it very attractive to receive a investment visa and a path to citizenship for purchasing a home from the newly formed government corporation disposing of the foreclosed inventory.



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Mega
06-12-07, 03:13 PM
Many years ago i used to work with a guy on car "Repo" work. On all the cars we recovered i only felt sorry ONCE!

79.9% where bussiness types who simply waited for us to turn up and handed back the keys. They had a "Great" time during the boom, now its a bust and they were back to an old beaten up Hatchback (Bye Bye BMW).

Others were less "Helpful", i mean it was our job to get the cars back.............Swapping cars with family members or bussniess parteners............Like WE had not thought of that. I each case we found it was some "High flyer".........Who discoved that he was a Turkey!

There are going to be some hard luck tales on this, but lets face it it was mainly driven by greed!
Mike

Ann
06-12-07, 05:09 PM
And in Florida, houses sellin' for $145K at auction that sold for $300K recently.

What kind of friggin' profits do these guys make off these things anyway that they can sell them at these prices? I'd feel like a real DOPE if I paid $300K. Doesn't this news get out fast? Now why doesn't everyone wait for the 1/2 off sale everywhere?

http://www.winknews.com/news/local/7896352.html?video=YHI&t=a

Sapiens
06-12-07, 06:40 PM
Housing Foreclosures Jumped 90% in May From Year Ago

http://www.cnbc.com/id/19193611


U.S. home foreclosures in May jumped 90% from a year earlier, reflecting a poor spring
housing market and foreshadowing even higher levels later in 2007, real estate data firm RealtyTrac said on Tuesday.

The May foreclosures -- a sum of default notices, auction sale notices and bank repossessions -- totaled 176,137, up 19% from April, the firm said in its May 2007 U.S. Foreclosure Market Report.


http://www.cnbc.com/id/19194098

bill
06-12-07, 06:50 PM
And in Florida, houses sellin' for $145K at auction that sold for $300K recently.

What kind of friggin' profits do these guys make off these things anyway that they can sell them at these prices? I'd feel like a real DOPE if I paid $300K. Doesn't this news get out fast? Now why doesn't everyone wait for the 1/2 off sale everywhere?

http://www.winknews.com/news/local/7896352.html?video=YHI&t=a


Thanks for the news clip it shows how the real estate debacle is unfolding.
I will have to accelerate my auction timing prediction a couple of years.
I think the news is getting out and the media is finally reporting some truth. It will be hard for the news media to avoid people’s outrage fueled by losing 150K as seen in your news clip.

lb
06-18-07, 01:40 PM
http://money.cnn.com/2007/06/18/news/economy/home_builder.reut/index.htm?source=yahoo_quote

Housing starts tomorrow at 8:30 AM EST.