Look Ma, No REO’s!

By: Mark Wisterman

My 2013 Photo-Web-Revised

 

Well, well, well what do we have here in the Lake Oroville area? The end of the Oroville foreclosure market?

Looking at this week’s home sales data for the Greater Oroville area you might draw such a conclusion being  there was not ONE foreclosed property that sold in the past week. (see the red highlighted stat).  To bolster your conclusion you may also point to the fact  that this is the first week since I have been tracking this number dating back to October 2009 that there has not been at least one bank-owned Oroville home that has sold.

As I prepared to share this week’s Oroville real estate information with you my plan was to caution you that we should certainly expect to see more foreclosure sales take place and that it is a little early to say the foreclosure market in the Oroville area has met with extinction.  However, as I was typing the first paragraph of this weekly editorial, and because I am such a great multitasker, I began think that I may be…..yes, wrong!

Maybe the “foreclosure market” IS over! Oh sure, there are still bank-owned homes for sale, but does the current inventory of Oroville bank-owned homes (19 homes, or less than 10% of the available inventory) actually constitute a “market?”  I wonder?

Here is another interesting fact this week: One of the most prolific bank-employed real estate listing agents in the Lake Oroville real estate market area has had only one closing this month so far. This is an agent who, at the peak of what actually WAS a foreclosure market, was closing nearly 20 transactions per month on average.  In the end she will probably end up completing 7 or 8 transactions this month (which, by the way, is pretty darn good) but nothing near 20.

Another interesting fact came from one of the many news sources I use to research real estate news in order to bring you the most informed opinion you can find about the Lake Oroville real estate market. It said that California’s foreclosure rates were nearing historic norms:

“California and Arizona had foreclosure rates of 1.6% and 1.5%, putting them at No. 37 and No. 38 in foreclosures nationally. Those states had the third and fourth worst foreclosure rates in the country at the depth of the housing downturn.” Click HERE to see the entire article

So, tell me. In your opinion have we come to the end of the foreclosure market?

 

MLS Stats for Oroville Area Week Ending Week Ending Week Ending % Change
7/26/2013 8/1/2013 8/8/2013 Previous Week
# of Total Sales 12 16 7 -56.25%
# REO/Short Sales Sold (SS) 5 6 0 -100.00%
% Sales that are REO/SS 41.67% 37.50% 0.00% -100.00%
Avg. List Price $180,675 $141,419 $131,100 -7.30%
Avg. Sold Price $170,692 $137,390 $130,243 -5.20%
Sold Price % of Listing Price 94.47% 97.15% 99.35% 2.26%
Avg. Days On The Market 90 49 51 4.08%
Total Sales Volume $2,048,301 $2,198,237 $911,700 -58.53%
# of Single Family Listings 195 183 191 4.37%
# Foreclosed On Market 25 19 19 0.00%
% of Foreclosed on Market 12.82% 10.38% 9.95% -4.19%
# Short Sales on Market 8 7 8 14.29%
% Short Sales on Market 4.10% 3.83% 4.19% 9.50%
Days of Inventory Left 114 80 191 138.56%
# of Pending Sales 63 65 65 0.00%
Data compiled from the CRMLS multiple listing service for single family homes in the
Greater Oroville real estate market area including the areas of Oroville, Palermo, Concow,
Forbestown, Bangor, Berry Creek, Brush Creek, Honcut, Yankee Hill
Information deemed reliabe but not guaranteed.
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6 thoughts on “Look Ma, No REO’s!”

  1. Mark Wisterman

    Thanks, very much for the discussion.

  2. Mark Wisterman

    George, I agree that the banks may be holding inventory. But as I said before, I would too if I had a large inventory of homes to sell. Not at any point in this downturn would I have done anything with my inventory to cause a further downturn in property values. To get right to the heart of it, my opinion is: Who cares if they are holding inventory. It is their property and while we are still in free market America, at least for the rest of today, the banks are free to manage their assets as they see fit in order to maximize their profits on behalf of their shareholders. Now having said that, I do believe that the banks have no idea how to manage these assets properly. If they are holding as much as some think they are they should be taking advantage of the current inventory shortage and get some more homes on the market while interest rates are still attractive and prices are moving up at a rate that would not be overly affected by some added inventory. What they will probably do, as they have done repeatedly, is overplay their hand and wait too long and end up adding inventory at a time when the rate of price increases are moderating and interest rates are a 6% costing their business money.

  3. George

    Thanks for your reply Mark- I appreciate your thoughts. Maybe flooded was a strong term to use but the banks certainly had way more foreclosed homes on the market than they do today. I personally know there are quite of few homes in the Oroville area right now that are sitting empty and have been for well over a year. There are also more homes that are in pre-foreclosure but yet the banks are still sitting on inventory. Back in the heyday this simply was not happening and the price per square foot at the time certainly is evidence.(not to mention the interest rates at the time) I believe the banks learned a lesson and are absolutely holding inventory driving up the price of homes in our area. If you have a different take on why banks are sitting on inventory Im certainly interested.

  4. Mark Wisterman

    You are right George, ‘normal’ is not here yet. While I do not doubt that the banks have homes in their inventory, in our market at least, the banks never did “flood” the market. I remember back in August or September of 2008 when agents and lenders alike were in a panicked frenzy about reports that the banks were going to release something like a million homes onto the market at one time come October. Never happened. The next year, the same thing happened. I kept asking the question of my fellow REALTORS, “If you had a million homes to sell would you put them on the market all at once?” Their answer: “Well, no.” Of course not. Why would they cut their own financial throats? One of the most interesting things that I have observed during the downturn was the evolution of agent’s attitudes towards how they perceived what the banks were doing. They first complained about how “evil’ the banks were for foreclosing on homeowners and now they are complaining that the banks aren’t putting enough foreclosed homes on the market. Interesting times we live in today.

  5. George

    The worst may be over but the truth is the Banks got smart and stopped flooding the market. The banks are holding foreclosed homes sometimes more than a year. There are a lot of foreclosures out there but they are not for sale…yet. If you take a close look you will also find that there are more than average homes out there that are behind on their mortgages but not far enough in the process to be listed as in foreclosure. The truth is normal is not here yet.

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