I thought it would be interesting to look at what’s going on in the foreclosure arena for our corner of the world. It’s looking like the clock is ticking for a lot of families and they will soon have to come to a hard reality about their housing needs. We aren’t seeing a ton of bank owned properties in the MLS yet, but the data here is telling us there are a lot of houses schedule for auction, where they become bank owned, and a lot receiving notices of default where the mortgage hasn’t been paid for several months.
This is the ForeclosureRadar chart for all of San Mateo County foreclosure filings for the past 12 months and you can see the Notice of Default (NOD) and Notice of Sale (NOS) are almost equal. Unless your head has been in the sand, you’re likely aware that the major banks stopped issuing NOD’s several months ago because of Robo Signing issues. These issues aren’t totally cleared up the the major banks are gearing up to send out the notices in 2011. So hold on to your hat when the flurry of NODs hits the mail. It will be a storm of activity.
Now let’s look at the same data for the city of San Mateo. It looks a little different than the County’s data. More activities here but there are NO deals. Those are gone. You can buy a foreclosed property in San Mateo under market price but not dramatically so. The banks want to see these properties listed near to market so they can recapture as much of their losses as possible. One really can’t blame them as they’ve lost billions of dollars due to the stupid lending programs they pushed, can one?
What this chart isn’t showing you is that there are currently 46 properties in foreclosure in San Mateo, 134 properties that are going to go to auction sometime soon, and 136 properties in pre-foreclosure (those receiving NODs). These are the hidden numbers for the City of San Mateo today, 450 properties that may show up for sale by banks. I use the word may because some will find funds to pay the bank back and some will sell on the market before the bank forecloses. These properties are in all of the zip codes for the city of San Mateo and are comprised of condos, townhouses and single family houses.
Let’s take a look at Burlingame and Hillsborough data. The two towns are combined because they share the same Zip code and ForeclosureRadar’s data is zip centric for this chart. NOD’s are up over sales by November 2010.
Now for the hidden numbers for Burlingame and Hillsborough. Burlingame has 5 foreclosed properties, 22 going to go to auction soon, and 21 in pre-foreclosure, for a total 48 distressed properties. Hillsborough has 3 foreclosed properties, 11 going to go to auction soon, and 7 in pre-foreclosure, for a total of 21 distressed properties. In Burlingame there are a few condos in this total but mostly single family homes. In Hillsborough, all are single family homes of substantial size.
Finally, let’s not forget Foster City. It too has had activity this past year. NODs are up but NOS are down. For the moment that is. Foster City has 8 bank owned properties, 26 going to go to auction, and 39 in pre-foreclosure status, for a total of 73 distressed properties. These properties are made up of condos, townhouses and single family houses.
The big question is what’s coming. We know of Shadow Inventory, a term for houses that have been foreclosed and are bank owned but not on the market. The banks are holding them off, for some unknown reason. Perhaps it’s the same reason they’re giving for making lending so impossibly difficult today. We also know that prices for the bank owned properties are going up from last year’s incredible bargains. If you are an investor and have cash, you might do okay, and something pretty good deals. If you’re the average buyer who still needs a loan, should you try to buy a bank owned rather than a short sale? I’d go for the short sale right now. Those prices are generally better, you negotiate with the owner and not the bank but you must be patient and be willing to wait it out for the bank to approve the offer and if there are more loans on the property than the mortgage expect it to take even more time as the listing agent must negotiate with all banks connected to the property. It can be a great way to get a property under market value today. As for tomorrow and 2011, my crystal balls are a little cloudy today, like the weather.