Skyrocketing foreclosure rate ripples across industry
Skyrocketing foreclosure rate ripples across industry
Posted 7/25/07
BAKERSFIELD - The skyrocketing foreclosure rate in Bakersfield is rippling across the real estate industry.
Many home buyers are staying on the sidelines until the market corrects itself, and home sellers are caught in a market that could be several years away from staging a comeback.
A trustees sale in downtown Bakersfield has homes that have been foreclosed on the auction block.
It’s something we’re seeing more and more these days. The auctioneer asked that we not use his name.
“There's a lot of over encumbered properties going to sale,” he said, “and a lot of people are struggling to make a profit on these sales. I get a lot of people showing up, but most of them go away empty handed. There are quite a few foreclosures going on right now and it seems like it's increasing.”
The numbers tell the story. In the second quarter of 2006, there were just eight single family home foreclosures.
Second quarter of 2007, there were 461 foreclosures—nearly six times the foreclosure rate for all of California.
The Daily Report tracks the housing market in Bakersfield, and Anne Marino, the owner, has an opinion on what’s behind the downward spiral.
“I think a lot of borrowers were naive, young kids and older folks excited about getting a new home, and they fell for the fancy financing,” said Marino. “We call it creative financing.”
Marino’s referring to tactics employed by lenders during the housing boom.
Adjustable rate mortgages and 100 percent financing designed to help cash-poor borrowers in pursuit of the American Dream.
Now, countless homeowners are living real estate nightmares.
“You have a buyer who's not really ready to purchase a home, being offered to buy more home than he can purchase on terms he can afford when it starts, but if there's any hiccup, or when the rate goes up, they can no longer afford the home,” said Real Estate attorney Richard Monje.
What does the spike in foreclosures mean to you? It depends on whether you’re in the market to buy or sell, but in both cases, most analysts agree—mounting foreclosures are depressing home prices.
“If you're selling right now, you're going to experience delays in how long it will take to sell,” Monje said, “and if you have pressure to move, because of a transfer or something, you're going to drop the price ... and now you've sort of set a market for everyone else.”
Monje and other analysts agree that with all things considered with Bakersfield’s slumping real estate market, it is a buyer’s market.
“I think it's a pretty good time to buy,” Monje said. “Prices may go down more, but there's a good selection right now, and you can wait, and maybe prices will go down, but you'll be left with what's left.”
As for the person looking to upgrade in a home, the upside is there’s a lot of inventory to choose from.
Prices are going down, but lenders are getting tougher and the creative financing craze we saw during the housing boom is less creative with more qualifying guidelines.
July 25, 2007 9:00 PM
Posted By: brynn galindo
Posted 7/25/07
BAKERSFIELD - The skyrocketing foreclosure rate in Bakersfield is rippling across the real estate industry.
Many home buyers are staying on the sidelines until the market corrects itself, and home sellers are caught in a market that could be several years away from staging a comeback.
A trustees sale in downtown Bakersfield has homes that have been foreclosed on the auction block.
It’s something we’re seeing more and more these days. The auctioneer asked that we not use his name.
“There's a lot of over encumbered properties going to sale,” he said, “and a lot of people are struggling to make a profit on these sales. I get a lot of people showing up, but most of them go away empty handed. There are quite a few foreclosures going on right now and it seems like it's increasing.”
The numbers tell the story. In the second quarter of 2006, there were just eight single family home foreclosures.
Second quarter of 2007, there were 461 foreclosures—nearly six times the foreclosure rate for all of California.
The Daily Report tracks the housing market in Bakersfield, and Anne Marino, the owner, has an opinion on what’s behind the downward spiral.
“I think a lot of borrowers were naive, young kids and older folks excited about getting a new home, and they fell for the fancy financing,” said Marino. “We call it creative financing.”
Marino’s referring to tactics employed by lenders during the housing boom.
Adjustable rate mortgages and 100 percent financing designed to help cash-poor borrowers in pursuit of the American Dream.
Now, countless homeowners are living real estate nightmares.
“You have a buyer who's not really ready to purchase a home, being offered to buy more home than he can purchase on terms he can afford when it starts, but if there's any hiccup, or when the rate goes up, they can no longer afford the home,” said Real Estate attorney Richard Monje.
What does the spike in foreclosures mean to you? It depends on whether you’re in the market to buy or sell, but in both cases, most analysts agree—mounting foreclosures are depressing home prices.
“If you're selling right now, you're going to experience delays in how long it will take to sell,” Monje said, “and if you have pressure to move, because of a transfer or something, you're going to drop the price ... and now you've sort of set a market for everyone else.”
Monje and other analysts agree that with all things considered with Bakersfield’s slumping real estate market, it is a buyer’s market.
“I think it's a pretty good time to buy,” Monje said. “Prices may go down more, but there's a good selection right now, and you can wait, and maybe prices will go down, but you'll be left with what's left.”
As for the person looking to upgrade in a home, the upside is there’s a lot of inventory to choose from.
Prices are going down, but lenders are getting tougher and the creative financing craze we saw during the housing boom is less creative with more qualifying guidelines.
July 25, 2007 9:00 PM
Posted By: brynn galindo
posted by Admin at
8:41 AM
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