With Foreclosure moratoriums lifted, more foreclosures are sure to hit the market in the coming months.
I was invited to an exclusive Intero agent meeting with the Bank of America West Coast REO manager, Ivan, a few weeks ago. In this meeting, Ivan said "6 months ago there were 60,000 REOs" nation-wide in the Bank of America/Countrywide portfolio alone. Today Ivan said there are only about 45,000 due to the moratorium. But now that these moratoriums have been released by law-makers, the Bank of America REO manager says he expects 70,000 REOs to be active come July and August 2009.
It is obvious when shopping with buyers, that the low-end is flooded with distressed properties (REO and Short sale), so here are the real numbers to truly depict the situation. Also I wanted to set a baseline for Santa Clara County and understand how large the REO market is here and then be able to use this to watch how these numbers change monthly.
I have pulled data for the entire Santa Clara county and have broken down the analysis by single family (SFR) and then by condominiums. I also broke down the SFR analysis to under $500,000 to understand the low-end market alone.
Single Family Residences (SFR):
1. 3507 Total active homes on the market
a. 288 REO - 8.2%
b. 863 Short sales - 24.6%
c. Distressed sales - 32.8%
2. 943 active homes (SFR under $500,000)
a. 198 REO - 20.9%
b. 572 Short Sale - 60.6%
c. Total distressed sales - 81.6%
3. 1034 homes SOLD in last 1 month timeframe (mid April to Mid May),
a. 455 REO - 44.0%
b. 125 Short sale - 12.1%
c. Total distressed sales - 56.1%
CONDOMINIUM
1. 1188 active on the market
a. 121 REO - 46.7%
b. 362 Short sale - 30.6%
c. Total distressed sales - 40.6%
2. 319 Sales within last month
a. 149 REO - 46.7%
b. 42 short sales - 13.1%
c. Total distressed sales - 59.9%
Of key distinction is that the SFR market under $500,000 is what is largely suffering from the REO and short sale markets as the data showed 81.6% of all active homes on the market in this price range are distressed sales. There is a large difference when compared to just 32% of the county wide inventory.
It is also interesting to note that even though only 32% of the market today is distressed, the sales are 56% distressed. I interpret this to mean that a larger proportion of distressed sales are selling in this county. The same trend is noticed with condominiums though not as large of a change from inventory to sold, only 40.6% inventory versus 59.9% of sales.
I will keep this data as a baseline and revisit in one month to see how things have changed.
Any other thoughts as to how I should look at the data?
