Foreclosure activity was down overall for 2011. In 2010 about 1 million homes were lost to foreclosure, and only 804,000 homes were seized in 2011 due to the legal scrutiny of the foreclosure practices slowed down by the documentation crises, known as robo-signing, that surfaced in October 2010.
The increase if foreclosure proceedings that began in the second half of 2011 will likely continue this year, which means that the number of home repossessions is likely to increase by about 25%.
In California there were 71,275 Notices of Default recorded at county recorders offices during the 3rd quarter of 2011, up 25.9% for the 2nd quarter. The defaults by price segment show that lower-cost neighborhoods are bearing the brunt.
California Counties with the highest probability of default were Sacramento, Madera and Stanislaus, while Marin, San Francisco and San Mateo counties mortgages were among the least likely to default.
Light at the End of the Tunnel
So what does all of this mean to the Real Estate investor? According to USA today, “Cash buyers are snapping up homes in markets nationwide, betting that deals won’t get much better.”
Elise Erwin, Century 21 M&M San Jose Sales Manager, when it comes to multiple offers on a property, “The cash buyer always wins!”
In the San Jose area, Elise says there are plenty of cash buyers available to buy homes at the lower price range; $200,000 – 250,000. In this price range, cash buyers are snapping up Condominiums and Planned Unit Development’s (PUD).
David Rivas, Realtor associated with Century 21 M&M Sunnyvale says, “I have 6 buyers lined up to buy REO’s. These buyers are also looking to buy home at the lower end of the price point. Homes in that price range just don’t become available that often.”
Marya Pimentel, Century 21 M&M Modesto Sales Manager says, “The banks prefer to work with cash buyers because there are ‘no appraisals’, ‘no conditions’ and ‘no required repairs’ with cash buyers. And, the banks don’t have to wait for the mortgage to close.”
“For that reason, the banks are like to accept a smaller offer from a cash buyer that can close in a few days,” says Marya.
“There are plenty of cash buyers available for properties in Stanislaus county for investment properties closing at the lower price point – under $100,000, upwards to $120,000”
According to Marya, “There is light at the end of this housing crisis…not a beacon, but at least a light.”