Bottleneck ahead: Foreclosed houses for sale are piling up

Fresh foreclosure stats indicate the pipeline of homes for sale in Los Angeles is filling up quickly -- with recently foreclosed homes.

ForeclosureRadar tracks initial foreclosure auctions, the ones usually held on courthouse steps, in which 98% of foreclosed homes are taken back by lenders, who then begin the sometimes lengthy process of bringing the foreclosed homes to market one at a time.

In February, according to ForeclosureRadar, 2,496 homes sold at these initial foreclosure auctions in Los Angeles County. During the same period, according to DataQuick, only 3,468 homes sold in normal, arm's-length transactions in the county.

Though these numbers are apples to oranges, coming from different sources and reflecting different methodologies, the trend is clear: Foreclosed properties are piling up, and are likely to play an increasing role in setting prices in parts of the county.

Here are the DataQuick and ForeclosureRadar numbers for L.A. County from the past four months:

Month      Sales (DQ)       Foreclosure auction sales (ForeclosureRadar)
Nov.        4,468                  1,653
Dec.        4,430                  2,138
Jan.         3,398                  3,201
Feb.        3,468                  2,496

There's one important point to be made about these stats: According to ForeclosureRadar's tracking, L.A. County does not have one of the more severe foreclosure problems in California -- 34 other counties have more foreclosures per capita. Which is a round-about way of saying that, as bad as the foreclosure problem is here, it is much, much worse elsewhere in the state.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Hat tip: Cal
Photo Credit: A foreclosed house at 846 N. Clybourn Ave., Burbank, via David Silverstein.

Comments

[Joseph...The Real Estate Guy]

Buy while you can!

Once foreclosures are gone, prices are gradually going up again.

[E]

It's because they are trying to dump the shi**y houses first.

Who wants those?

[bottom line]

Wowzer, love the headline..

Bottleneck ahead: Foreclosed houses for sale are piling up

This just in, 'Gas prices are rising', 'The dollar is a postage stamp,' & ben and henry and the shrub AREN'T 'on top of it,' LOL. Oh, & soup comes in a can.

How many here had parents who were born/grew up during the Great Depression? Anybody? Did they tell you the stories? Did they instill the values of integrity and thrift in you?

Paulson made $37 Million @ Goldman Sachs in '05 before replacing the inept Snow in mid-'06. Anyway, on the GD part above, I can tell you with a very high degree of certainty & absolutely no pleasure that things are going to get way worse. Let me tell you how the cow ate the cabbage, what's ahead will not resemble 'kids day at the fair.'

[Corntrollio]

There is a lot of attention being paid to foreclosures, but much less attention paid to defaults. It'd be nice to see coverage of NODs, aka houses that are likely to be foreclosed upon if they don't sell.

[Victor the Predictor]

Lawrence Yun (Chief "economist" at the National Assoc. of Realtors) did NOT predict a huge backlog of foreclosed homes.

So.... how come.... he was just named number 5 out of the top 10 economic forecasters by USA Today?

Yes, read that again. http://tinyurl.com/39qsuf

Highlight: "USA Today enlisted the help of the Federal Reserve Bank of Atlanta to determine the most accurate forecasters among the economists surveyed in the newspaper’s quarterly survey on the U.S. economy."

Fed is undermining its own credibility now?

USA Today Article: http://tinyurl.com/2ks49g

Top predictor was Berson of PMI. The mortgage insurer. This guy definitely has a handle on risk. Wonder what he could tell us about Fannie Mae, where he worked before joining PMI.

I predict that calculatedrisk, where I found this story, will have at least 5 more important revelations about housing and the economy over the next 5 days.

I also predict that we'll find out that Lawrence Yun is/was on CIA payroll. Evidence:

1) He has no Wikipedia entry
2) It is very difficult to determine where and when he was born. His official bio's don't say a word.
3) DC area graduate school, just like his predecessor Lereah.
4) He is *not* gifted at disinformation.
5) He was seen admiring the stainless steel applicances and granite countertop at Valerie Plame's secret Santa Fe safe house.
6) Has 8 fuzzy years between the time he completed his b.s. in Engineering at Purdue and his PHd in econ at U. Maryland.
7) Spent time in Russia "teaching them how to be capitalists."

[investorguy]

And they'll continue to pile up until banks start discounting heavily, so investors can get in at a level that will allow the market to restart.

[Casey]

In real estate school, we all learned that a contract for an illegal purpose is unenforceable. What about a contract that, on its face, is impossible to complete?

We have all these subprime mortgages in which both sides understood that they can never be repaid as written. They were completely dependent on a housing bubble that would allow the borrower to pay off the mortgage as part of a refinance in the future.

Lenders surely knew that the bubble would burst; perhaps some of the borrower did too. In any event, is there not a case for mandating the renegotiation of contracts when their very terms and purpose are impossible to complete?

Just a thought.

[anonymous]

Probably should watch the linked video from Merrill Lynch economist Dave Rosenberg. Looking past the Fed dropping rates like a stone and Bear Stearns, there are some fundamental problems with the consumer economy that do not bode well for the housing market this year. Banks took $130 billion in writedowns last year (when employment went up). Employment's going down right now.

[Joseph... the Real Estate Guy]

I am mesmerized at the disappearance of "Regular Home Owners" in the market place. I guess they don't need to sell. I am not joking.

[jaded]

and houses, foreclosures or not, will continue to pile up as long as jumbo loans stay at 7%. Where's the incentive to buy?

[Pop]

"L.A. County does not have one of the more severe foreclosure problems in California"

You forgot to insert a "yet" in there.

[sfvrealestate]

FYI, the house in the picture is at 846 N. Clybourn in Burbank and it is now in escrow.

[Pop]

Hey Joseph...the Real Estate Guy,
I have a question for you. What are you doing with all your free time these days?

[mike]

if they would lend money, i would buy them and rent them out!!!

[Rob]

Victor, thanks for the laugh.

Reminds me of the old "payola" in Radio, Oscar nominations, and Superdelegates...

[jason]

joseph, i guess we are back to buy now or be priced out forever...

[Laker]

Joseph...The Real Estate Guy wrote: "
Buy while you can!
Once foreclosures are gone, prices are gradually going up again....."
hey Joseph..., Last year i registered with REDC auction company and attended their auction. Since then, I'm getting about every 1-2 months a new listing booklet...
Well, I'll tell you what, the latest i got 2 days ago, was not a booklet. It looks more like a bible book! I have collected all of them, and my observation is that every new book (i.e auction) is larger by 50%, and therefore has many more houses. That means true foreclosed houses are increasing. So you don't have to be economist to know when to buy. You simply need to put the REDC "booklet" or book on a scale and check the weight. As soon as you get one that is lighter than the previous, start looking to buy..
So far, they are just getting bigger and bigger....
Joseph...you are full (fool) of sh*t.

[beezlebub]

Imagine all gas stations closed, imagine all banks closed, imagine Safeway closed, imagine no government entitity to call because the phones don't work. With a variety of factors occuring, this could happen overnight. And electing Hussien Osama will only increase the odds.

[MyLessThanPrimeBeef]

Joseph...the Real Estate Guy, not only are 'Regular Home Owners' disappearing, as you have noticed, but thanks to WTO & NAFTA, the 'class' in the Middle Class is also fading at an alarming rate.

[CD]

Investor Guy-The market to restart -
What market, you mean the one where you need another sucker who will have to find another sucker to buy a house from the previous sucker that keeps rolling $250.000 price over price with each time an extra layer of travertine and granite ???That the market you want back ? Ahhhhhhh the good old days of granite counter and travertine floors, the Beige days......

[bottom line]

beezlebub...hopefully the doctors & paramedics find you quickly. Put down the crack pipe & back slowly away from the keyboard. Curl up in a fetal position & wait, help is on the way.

[xtine]

beezlebub--

1) Please tell me WHY you used Barak Obama's middle name? If you are trying to say something, just say it. Seriously.

2) The crash you speak of will happen no matter who is president in 08. It was caused by GWB's "business-take-all" strategy. We must elect a president who can make it less severe...by like....you know....not spending a trillion dollars a year on a war.

[l.a.guy]

"Imagine all gas stations closed, imagine all banks closed, imagine Safeway closed, imagine no government entity to call because the phones don't work." beezlebub

Wasn't that a John Lennon song?

Oh, and stop listening to Rush Limbaugh, it will melt your brain eventually.

[Uncle Billy]

Rob: at least those keep the money in the family somehow. Airbus tankers for the Air Force? Can you imagine the payola involved in that one?

[Mike]

The fact that this website exists is incredible and a sign of the times. Just give us $995 and we'll make all your problems go away!

www.youwalkaway.com

[CD]

That AIrbus tanker will be the ghost tanker. The French cannot deliver, too many strikes, too much problems with their German friends. It's just a PR coup and a very funny one. How many bottles of "Veuve Cliquot" Champagne and evenings at the Moulin Rouge with the mademoiselles of the night hummmmm.........
We shall never know....Or could we ????

[MyLessThanPrimeBeef]

Xtine, to be correct, he actually wrote Hussein Osama, not Hussein Obama.

I think it is somehow related to the reason why Bush, while not calling Adolph Hitler Adolph, decided to be friendly and on a first name basis and called Saddam Hussein Satan, err, check that, Saddam.

In both cases, they try to avoid the name Hussein, but apparently for different, yet subtle, very subtle indeed, reasons. One wants to drop Hussein because he likes Satan, sorry again, Saddam better; while the other just doesn't want Hussein, period. But what can I say? Humans are very smart...too smart. I am glad I am just a little pebble.

[Kathy]

Hey Peter,

How about getting your old buddy Leo Nordine to update us on the foreclosure biz?

[investorguy]

CD: You are living proof that the chlorine in the gene pool needs to be refreshed more often.

Investors have always restarted stuck markets by helping banks get properties off their books, and underwater sellers to get out in one piece.

You need to turn off HGTV and get out into the real world. Not all investors are amateur "flippers."

Those of us who are professionals buy a distressed product, fix it up, and get it back onto the tax rolls, either as a rental or at realistic sales prices in the hands of people who can actually afford it.

And I will not waste any more time on you.

[REO Nordine King of WTF Pricing]

We should here from Leo Nordine?

Look at this gem from Long Beach (Nordine listing). Regardless of Redfin's dates, it has been on the market for over a year without a price change.

http://www.redfin.com/stingray/do/printable-listing?
listing-id=1333294

Additionally, the second house is a 1/4 mile away. WTF? I understand how an individual homeowner might sit on a WTAF price wating for someone to end the nightmare, but a bank?

http://www.redfin.com/stingray/do/printable-listing?
listing-id=1563817

One last thing, the bank owned property is distressed (no appliances, plywood cabinets, etc.). The second proeprty is compeltely remodeled and clean.,

[Jeff]

Lawrence Yun is a totally discredited economist...he's a shill for the real estate industry, and his forecasts are always dead wrong.

[Rob]

"Airbus tankers for the Air Force?"

I saw some guy in the Boeing parking lot playing Taps on his French Bugle.... Ironic... : )

Use to work for MDAC in LBC. au revoir et salut...

[landman]

The house in the picture, 846 N clyborn
has not been sold! It fell through. The condition of the house may have scared them off! This place is a mess and needs new evertything. and at something like $327 a sq ft. This baby will be sitting for a long time I am sure