Bay Area

[newbiehere]

http://www.mercurynews.com/business/ci_19899224

"Eight $1 million-plus homes in Atherton and 22 in Los Gatos were in some stage of the foreclosure process in December, according to ForeclosureRadar."

I haven't seen this article get discussed. It claims even Los Altos, Atherton, Los Gatos, Saratoga etc have many foreclosures coming this year than before. This seems a little suprising to me since I see/hear of multiple offers, prices being bid up etc in these neighborhoods. Such activity should reduce the number of foreclosures compared to last year not increase it! Maybe the telling comment in this article is that owners of higher end homes had more staying power so they were able to hang on longer - but not anymore.

Foreclosures at the high end increase across the Bay Area

The housing crisis, which first devastated borrowers who purchased lower-cost homes with subprime loans, has caught up with people whose wealth helped them hang onto their houses longer.

Throughout affluent communities in the Bay Area, million-dollar-and-up homes are increasingly being lost to foreclosure, or sold as a last resort for far less than their mortgages.

More than 1,500 Bay Area homes with mortgages of $1 million or more were scheduled for auction last year, more than double the number in 2008, according to ForeclosureRadar, a foreclosure tracking service.

"The fact is, upper-end folks are starting to feel the crunch," said Barbara Safran, president of the Contra Costa County Association of Realtors.

Santa Clara County had more than 400 homes valued at $1 million or more scheduled for auction in 2011, the most of six Bay Area counties.

Anne Walker of Coldwell Banker in Cupertino has a $1.7 million foreclosure listing in wealthy Monte Sereno. Like others in their situation, the former owners have no interest in talking about it publicly.

"Most of these higher-end people are, like, 45 years old plus, and they've gone through all their assets," Walker said. "It's a really devastating situation for them. They thought they had planned. They had their kids' college fund, they had their 401(k)s, the stock, the mutual funds, and they've been hanging on for the last three years. They've gone through everything, and

they have nothing left, not even the house.

Read the full article at http://www.mercurynews.com/business/ci_19899224

........

FOR SALE

1,500

Homes in the Bay Area with a mortgage of
$1 million or more scheduled for auction in 2011, twice 2008's total

400

$1 million homes in Santa Clara County up for auction -- the most in six Bay Area counties

[pilastr]

Interesting. And today might have marked the opening of the shadow inventory sluice gates; alas, not yet. Turns out arbitrary deadlines set by the banks have zero power over states attorney generals who just ignored today's big deadline. For now, ARMs continue to swell with more unholy shadows sure to be born to the "market" every day.

http://www.reuters.com/article/2012/02/07/us-mortgage-settlement-idUSTRE81600F20120207

Is it only me or.. apart from blogs like http://www.housingpredictor.com/2012/california.html , are news articles in CA on this topic never more than a few paragraphs, when they exist at all. http://www.latimes.com/business/money/la-fi-mo-california-settlement-20120205,0,3172322.story

By contrast, this article NV journalist is willing to say we'll see the shadows take shape by summer.

"The shadow inventory created by the sharp drop in notice of defaults is set to make its mark by the summer.

In the current market, residential-sales inventory typically sees an equal three-way split between bank-owned foreclosures, short sales and homes with no special conditions.

With distressed properties typically taking several months or so to hit the market after a notice of default is filed, experts expect the reduced supply in bank-owned inventory from October to show its full effect on the market around July.

“You’re starting to see a shortage now, and I’m hearing it from everybody,” Wiseman said. “We’re starting to see demand on properties that we normally don’t see demand on, like homes that aren’t in the best physical condition.”

Banks currently are negotiating with the Nevada Attorney General’s office to find a way to start filing default notices again while complying with the new foreclosure law. One solution under discussion is to allow several people to certify different steps in the foreclosure process instead of having just one person signing an affidavit that attests the accuracy of all the steps.

“The banks certainly want to be able to proceed, so they’re actively working with the attorney general’s office to come up with a solution that meets the (attorney general’s) requirements,” Sigstad said. “I wouldn’t be surprised if this issue gets resolved within 50 to 90 days.”

Meanwhile, the excess shadow inventory from the default notice freeze continues to get added to the mix. The shortage in bank-owned inventory could provide a boost to sellers of nondistressed properties. It might even give home values a bit of a shot in the arm, some experts said, though it would only be delaying the inevitable.

“That would be a false price increase,” Kaiser said. “Once the issue with (the law passed in October) is resolved and foreclosures happen again, prices will come down to reflect that. They’re going to have to go through all that inventory at some point.”

[lg_homebuyer]

In best neighborhoods of Santa Clara county, the prices are at most 10-15% below the peak, in many of them, they're even equal to the peak already. It's hard to imagine for people to face foreclosure in those areas this year, unless you have messed up your finances really badly. 

For less desirable neighborhoods, either because of schools or distance from majority of employers, where people have bought McMansions for $1million+, what the article is predicting sounds more plausible.

[elt1]

Just because a house is scheduled for auction doesn't mean the house will foreclose. I saw one house scheduled for auction for several months, many dates. Turns out the owner was a mortgage broker--just playing chicken with the bank. He won, got his loan mod and is still living there three years later.

Most banks don't want to take the expensive homes to the auction, they would rather short sell or work out a loan mod. Plus most wealthier owners can afford the legal advice to help delay or stop the auction.

There is very litte activity at the court house. San Mateo county had less than 300 homes sell at auction to a 3rd party last year.

One just sold in Atherton on Selby next to El Camino. Terrible, noisy location, many bidders--auction took 2 hours--buyer paid more than retail--$1.2m(the bottom end for Atherton)

[ptiemann]

This mercury article had been posted on patrick.net as well. I responded there with a simple fact.

Yes, 400+ such homes were scheduled in 2011.

Only 29 of them actually went to auction. The vast majority of those 'over 400' were brought current or went through loan mod, short sale, post-poned to 2012, bankruptcy filing or a combination of these.

[SamShuehRealtor]

The article is saying the high end homes now showup as a foreclosed homes.  These areas never had any foreclosure or default to start with.

The data below does not suggest there were no foreclosures on high end before:

http://www.trulia.com/blog/sam_shueh_1/

Sam Shueh