Tuesday, January 8, 2008

Mortgage Kaboom

Here are the yearly totals from Foreclosure.com for Pre Forclosures and REO's. You can see a trend of more and more Pre-Forclosures turning into REO's (especially in Riverside). I fully expect this trend to continue as more and more people find it impossible to sell, refinance or come up with the money to make their loans current.



The amazing thing about this chart is if you look at how many REO's there are each month and compare that to the monthly sales you can see that they are getting closer. Soon banks will be taking more homes back per month than there are sales.

6 comments:

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Anonymous said...

Golfer_X

Do you think there were any areas in the inland empire that were undervalued until the boom? I guess I find it hard to believe that homes in some areas like chino might go back unto the 100's again. I expect high 200's maybe?

What do you think?

golfer_X said...

Undervalued, I dunno. Things were affordable and in line with fundamentals in the late 90's. I think 97, 98 was when you could buy and get a good value in most areas. By 2001 the good values were gone and prices were once again getting out of line with rents and incomes. It started to correct in late 2001 and early 2002 slightly until the Fed and Bush stepped in and started making money easy to get. That's when the market went parabolic and things got way out of hand. They are trying it again but there's no way to save this ship now. All they can hope to do is make the crash less severe. They have to be careful though or they might end up pulling a Japan style stunt and make this mess last 15 years instead of 5. I'm firmly in the camp of let the market fix itself. Take your medicine now and move on. The Fed and the White House are worried about it spreading to other areas. If the consumer gets too spooked they may stop spending and that would send the whole economy down in flames.

smokingcrackmakespricesgohigher said...

"If the consumer gets too spooked they may stop spending and that would send the whole economy down in flames."

It appears to me that the Fed is more concerned about Recession than inflation. Bernie boy has essentially just announced the Fed will be dropping intrest rates (and thus flooding the market with more $). With oil and other commodity prices heading through the roof, I'd say a major Recession is in our path.

Every one getting excited about the Fed rate cuts...most people don't realize the Fed Rate and LIBOR are totally different things and even though the Fed is cutting its rate, the LIBOR is where most Credit Cards and ARMs are pegged. The debt laden are still screwed.

Anonymous said...

'I find it hard to believe that homes in some areas like chino might go back unto the 100's again. I expect high 200's maybe?'

Chino homes sold in 1997 in the 100s. I personally dont think it will go that low, I agree with the 200s but values are plummeting hard in the IE across the board. I know many people in Chino and all of them got loaned more than they can afford or are living off the HELOC. Plus what is so great about Chino besides proximitiy to LA county? Its an older city with its share of crime.

Anonymous said...

Its not Pomona, the yards are bigger on the houses (in some areas of town). Its pretty close to north orange county where I work. It has a pretty good school system, and I like its agricultural roots.