One-third of SoCal housing inventory is 'distressed'

Wednesday morning links from here and there:

From Dr. Housing Bubble: Foreclosures and short sales make up 33% of for-sale inventory in Southern California.

From the Detroit News: A vandalized, foreclosed house that sat on the market when priced at just $1,100 has sold -- for $1.

From Reuters: A slew of factors suggest the worst may soon be over for the housing market.

Calculated Risk disagrees, writing the bottom in prices could be four years away in some bubble markets:  "Expect to start looking for the bottom in the bubble areas in 2010 to 2012 or so."

Newsday reports on a novel foreclosure avoidance strategy: A 60-year-old man brandishing a handgun tried -- and ultimately failed -- to prevent sheriff's deputies from evicting his mother from her foreclosed house.

-- Peter Viles
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo: Getty Images

Comments

[TakeFive]

“Authorities say a son held Bergen County sheriff's officers at gunpoint as they tried to evict his 88-year-old mother from her foreclosed home. “

First reaction, sympathy. Until:

“Beatrice Brennan had refinanced her two-bedroom, $250,000 home and had fallen behind on payments.”

She might have extracted every penny out of this house at some inflated 2006 price. Maybe she even came out ahead of what it would fetch today. And when you’re 88, who gives a rip about a foreclosure on your credit.

My guess is the son got the money and lost mon’s house in the process.

[maxo]

The saddest part about the "$1" Detroit house is that the property taxes are still $3900. It's time for a tax revolt!

[E]

Hmmmm.

Who to believe. Reuters or Calculated Risk.

Well...being that CR and Tanta have been right about 10X more than any "news" outlet throughout this debacle, I think I'll go with him.

Sorry Pete...I won't even let *your* blog try to tell me when the bottom is in. MSM thing you know.

[Laker]

"....The agent did say that the buyer agreed to pay the full list price of $1, and planned to pay cash....."

Wow...So banks would not give a $0.99 cent mortgage today? How about it she tried to get $0.80 cents mortgage while putting a boasted 20% down of 20 cents....
Damn....

"....how soon the buyer can expect to recoup her four-quarter investment is questionable....."

I just found 3 quarters in my drawer and just short of 25 cents...I'm looking for a partner to come in with 25 cents, so we go and buy the place....

"....Meanwhile, the new owner will owe $3,900 in property taxes in 2009 on her dollar purchase unless she challenges the tax assessment...."

I don't see why she can't reassess the taxes as she did pay $1.00 for the house, fully documented and legit. I assume their property taxes are 1-2%, so she should pay 1 or 2 cents a year for property taxes

[Nelcisco]

"If you really think this is the bottom, you're welcome to go out there & purchase a home w/your own $."

Last paragraph of Dr. Housing Bubble's artical. Right on Dr.

Just a note: Down payment assistant programs like Nehemiah and Amerideams are in Jeopardy come October.
I have 100K borrowers that need assistance because they don't even have 15k for down payment and closing cost on a 250k house....did you hear that? on a 250k house, $100k earner (household income,whether its one person or hubby and wife).

Big Lebowski: the next chamber of commerce event you attend tell the realtors who "prattle on" as you say about how its the best time to buy give them my example

[LA]

Excellent case in point, Nelcisco. Do your borrowers deserve to be homeowners?? If a single or a couple making $100,000/year can't save $15,000., it says more about their ability to manage money than it does about the mortgage market.

It's called "living within your means," people!

[Laker]

Nelcisco,
I agree with LA.
If $100,000 paycheck dude, can't save $15,000 for a house purchase, he is either dumb, incompetent, or simply over extended.
Say, i had no money saved for a down today, i could get the wife/mother/sister/brother/uncle/father to use one of his credit card and do a balance transfer to my account. I can easily pull about $50,000 with no effort doing that, and there is my down payment....
If i do put some effort, i can get probably more than $100,000 doing that.
This buyer does not deserve to be a home owner.
For $250,000 house, his income is well qualified (as long as he have minimal other debt), so assuming he lives today in a comparable rental to the $250K house, his is probably paying $1000 rent or less while pulling in $8300 gross or $6500-$7000 net. He has at least $5500 disposable income, he should be able to save $15,000 in one year!
Next!!!!!

[Maggie Knowles]

I trust the analysis of Dr. Housing Bubble and CalculatedRisk before most others. Besides, we still have the option arm resets beginning 2nd quarter next year, and don't those peak in 2010?

I've been working exclusively with buyers this year, and most are waiting. But some people don't want or can't wait. Of those who bought this year so far, two couples about to be married and whose parents helped them with their down payments, four investors who paid all cash for fixers that will be rentals, and a couple who had to move from their beautiful spacious home in Palmdale, to something smaller and not as nice in Lake Balboa, but about 10 minutes away from their work.

[Cal]

I asked someone with MLS access to break out inventory for the San Fernando Valley, they gave me these numbers:

6911 - Active Listings
794 - Active + REO
2457 - Active + Short Sale

So 47% of active listings in San Fernando Valley are distressed (there is probate, relo and vacant listings as well as other stress categories but I can only get so many stats out of people before they tell me to leave them alone)

2072 - Backup or Pending
640 - Backup or Pending + REO
551 - Backup or Pending + Short Sale

57% backup or pendings are distressed.

[Nelcisco]

LA, after putting in their loan, the underwriter thru my processor is giving me conditions and more conditions, my realtor gets frustrated, but I told them upfront that I may not be able to get them a loan simply because of the changing guidelines. Yes its a money management problem more than anything.

Laker, you must be in loans also because when I took on this file I came to pretty much the same conclusion, but what it tells me is if thats the case with people in that income bracket, it will be a long RE correction