The Valley is Still Hot!
Pete Carey from the San Jose Mercury News reports on what we all knew was coming. The government types took pleasure at reporting that the housing market had “turned the corner” during January stating that the number of foreclosures had dropped. As Mr. Carey reports, foreclosures are back with a vengeance in the Silicone Valley!
The “blip” that the government hung their hats on resulted in the robo signing (i.e. Falsification) of foreclosure documents. This scenario caused banks to stop foreclosing for a small window of time. Mr. Cary reported that the foreclosures are at 2008 levels. He also expects the volume of foreclosures to continue to rise.
My guess is that this trait is prevalent throughout the US especially in the harder hit markets.
Silicon Valley real estate: Foreclosure lull ends in Santa Clara County
By Pete Carey
After a two-month lull because of a national paperwork scandal, foreclosures in Santa Clara and San Mateo counties in January returned to levels that have prevailed since 2008, indicating the crisis will continue this year but also putting more low-priced homes on the market.
Last month’s increase in foreclosures may be followed by bigger increases in the next few months, according to some real estate professionals.
In Santa Clara County in January, 398 home were either repossessed or sold by lenders to third-party buyers, a nearly 70 percent jump from the month before, according to real estate information service ForeclosureRadar. San Mateo County had 160 foreclosures in January, a 75 percent jump from December.
But the slide into foreclosure can be a long one. According to ForeclosureRadar, it takes an average of 292 days from the time a bank files a notice of default to the actual sale of a home on the courthouse steps.
Ingeborg Dale, 77, an artist who is dealing with diabetes, heart problems, cancer, arthritis and an impending foreclosure, said her son hasn’t been able to make a payment on her Santa Clara townhouse for a year and a half. She let him take out a loan on her home, which she has lived in since 1963 and which was paid off at the time.
“He lost his job, got a heart attack and four ulcers. With no job, he can’t afford to pay. They tell me they are selling it March 18,” she said.
‘Very frightening’
“It is very frightening when you are my age,” she added. “I have quite a few friends willing to give me a room, but I have two little dogs. They are my children.”
Dale said she is working with Project Sentinel, a nonprofit housing counseling agency in Sunnyvale. “It was supposed to be foreclosed on Jan. 12, but they got it stopped until March 18,” she said.
While foreclosures come with the pain of someone losing their home, the houses that end up on the market can offer first-time buyers a crack at homeownership.
“This will give us some fresh inventory of low-cost homes come this spring,” Sean O’Toole of ForeclosureRadar said of the January increase. “That’s good and could help home sales. It’s not going to be a lot, because the volumes aren’t that high, but this back-to-bank inventory tends to be pretty popular among buyers.”
According to ForeclosureRadar, in January there were 2,420 bank-owned homes in Santa Clara County and 3,900 others in which the banks have told the owners the home is to be auctioned. In San Mateo County, 1,116 homes are owned by banks and 1,459 others are scheduled for sale. More than 5,500 homeowners in the two counties have fallen three or more months behind on their mortgage payments.
For auctioned homes, the winning bid was an average $400,000 in Santa Clara County and $458,000 in San Mateo County, according to ForeclosureRadar.
The increase in foreclosures brings them back to about where they were at the end of last summer, before “robo-gate” — a scandal over bank paperwork — caused major lenders to halt foreclosures. O’Toole said an expected backlog of two months of delayed sales has not materialized.
“I wouldn’t sound an alarm over these increases,” O’Toole said. “It’s really just stuff returning to normal.”
Homes to hit market
Even so, thousands more homes are waiting to hit the market. “There is a crazy number of people we’re talking to that are over 12 months behind on their mortgage payments that have not been foreclosed on yet,” Dominic Nicoli of Intero Real Estate said. Nicoli does foreclosure sales for several major lenders, including Bank of America.
“We had not gotten any new listings in three months and we got two last week,” Nicoli said. “They are definitely accelerating evictions.”
While banks are foreclosing on properties again, it’s still a smallish part of the overall market for homes, said Richard Calhoun of Creekside Realty in San Jose.
Calhoun said foreclosure resales are normally about 15 percent of homes sold in Santa Clara County, although that increased to 24 percent in January.