Foreclosure Numbers…Accurate or Not?

As I was showing property in Lake Elsinore, California yesterday. I was coming to my own conclusions as to whether or not the statistics that are being bantered around were accurate.
What was interesting was that my clients were thinking the same thing too.

They asked “Yvonne, this subdivision looks like a ghost town, but there aren’t any For Sale signs on these houses. What do you think that means?”

Well, they had read my mind. What I thought that meant was that the Mortgage Bankers Associations numbers of falling delinquencies is WRONG! In Riverside County, California you can go almost anywhere and see vacant homes, no signs in the window, no For Sale signs, nothing, nada!

I would consider these properties to be the “Shadow” inventory that we hear about. What does that mean for buyers? Well…it means if you buy something right now you are getting a good deal with most of the prices off by 50-60%. Does it mean that prices will dip again?….Possibly.

If the Government stepped gracefully out of the real estate “recovery” position, and let the lending industry and the delinquent homeowners work out their problems on their own, we will see more inventory on the market which might cause another dip in prices. But, we must factor in the numbers of buyers that are in the market right now who CAN QUALIFY, WANT TO BUY and CAN’T GET A HOUSE due to TOO MUCH COMPETITION. These buyers will be able to absorb a large number of the homes that we need to be released into the market. Hence, not the scary “double dip” that is being rumored.

During the Foreclosure market of the 1990′s, when there was no Government intervention we started to see a recovery within 4 years. Unfortunately, the big players involved are extending the inevitable pain.
There will be no heroes in this mess, I just wish certain companies and people would stop trying to self-proclaim themselves as one.