Last month, I promised to get back to looking at some numbers and trends, and I will do that shortly. But hey, it’s almost Halloween! So when I read about Vampires and Zombies in a recent real estate article, I couldn’t help but share these thoughts first. What’s the connection? These are terms that are actually being used to describe foreclosure (bank-owned) inventory.
Let’s start with the “Vampire” foreclosures. The reference here is to properties that have already been foreclosed on and are now lender-owned, but that are still being occupied by the former owners. According to CBS Moneywatch, the former homeowner may still reside there because the bank is giving them extra time to move out, or it might be because the bank prefers not to leave the home vacant.
And then there is the “Zombie” factor. This term refers to homeowners who have abandoned their properties, expecting foreclosure, but the bank has not done so. In the meantime, the former home’s property taxes and other costs continue to accrue, all on the homeowner’s tab. So if you add up the Zombies and the Vampires, you get roughly 400,000 properties nationally, all being held off the market, and creating part of what is often referred to as “shadow inventory.”
But just like the day after Halloween, when reality sets back in, I need to bring all of this back home. The fact is, we have nothing like those numbers here in California, and even fewer in the Bay Area. Distressed properties here have dwindled considerably. Statewide, according to RealtyTrac, the number of foreclosed properties in September of 2013 has decreased by nearly 62% over the same period a year ago. And the number of homes in “pre-foreclosure” has dropped by 50%. RealtyTrac quotes the statewide foreclosure rate as one in every 863 properties. But, in San Francisco, it’s one in 5281!
Foreclosures aren’t unheard of in the Bay Area, though. Of the nine Bay counties, three (Napa, Solano, and Contra Costa) each have rates that are higher than the statewide number. And not that much farther north, Lake County has the highest rate in the state, at one in 311.
But the news is not all bad for these mentioned counties because, in fact, they are the ones poised to make the strongest comebacks. In August (2013), according to the California Association of REALTORs® (CAR), Napa County experienced the biggest (median sold) price jump at 46.7% over the same period in 2012, followed by Solano (46.3%), and Contra Costa (28.7%). Bay-wide, we saw a 24% median price increase; pretty solid, one might say, except that it was a 2% decrease over the previous month, so it appears that our steady improvement in 2013 may be slowing.
CAR just released its statewide Housing Market Forecast for 2014. It shows the median price increase is expected to be 6% next year. Not a bad investment, then? Well, compare it to this very year, which when wrapped up is expected to enjoy a 28% increase across the state. Scary news for future sellers? Well, hopefully not the stuff of vampires and goblins, but, just in case: Quick – call your REALTOR! We still have two and half months left in 2013!
A Bay Area native, Mark Penn has been a REALTOR® with Coldwell Banker since 2004. He is also active in animal welfare, and is a former educator, facilitator, and air traffic controller. Mark can be reached at mark@MyHomeInSonoma.com.