Costa Mesa Foreclosures Still Looming
Colin Delaney June 3, 2013
Colin Delaney June 3, 2013
Currently, less than 11% of our Costa Mesa market are distressed listings. Great news, clearly. The quick runup in prices has brought a lot of equity back to a lot of folks who were on the cusp of negative equity. Most people who bought homes between 2005-2007 might still be in a negative equity situation, although that is still changing. Do you think we are out of the foreclosure woods yet?
I have buyers who missed the great short sale-a-thon about 1-2 years ago and still ask me if they could find a deal like the short sales presented. So, are deals still out there? Yes, according to the Federal Housing Authority. Currently, there are approximately over 151,000 REOs held by the bank, more than 37,000 Hud-owned homes, and another 1.7 million homes in shadow inventory. Yup, that’s a big number. How much of that is in Costa Mesa real estate? Hard to say, but my guess is that if all of those homes hit the market now, we would probably be around 25%-30% of the active market share. Do you think that would shift prices/inventory?
Yes, inventory would rise and prices would make a quick transition downward. Technology-based real estate data firm Radar Logic contends that our quick gains are not sustainable. They believe seller psychology newly built home supply, and low rates will force change in the local Costa Mesa real estate market.
I fully agree seller psychology right now is that they are waiting for even more gain before listing/selling their homes. They see the steep run in prices, and think we can actually get back to market peak in 2006. Unlikely. Will low rates continue- yes. But eventually, rising rates will force out wanna-be buyers and investors alike.
Radar Logic also contends that newly built homes will slow down our market. Our local Costa Mesa real estate market is fundamentally different because there is no new land to build. Any new construction comes from tear-downs/repurposed lots.
My takeaways right now are this: If you are trying to get top dollar for a home, and you have a plan, there is not a better time to sell- this market will change. New inventory is coming, in some fashion, and it will limit price gains.
Need help? I’d love to help you buy or sell in Costa Mesa. Call Colin at (714) 743-9882 or e-mail me.
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Colin’s commitment to getting sellers top dollar and securing the best deals for buyers is backed by a proven track record and extensive local knowledge.
