Adam Brett's Blog - All Things Real Estate in Fullerton and Beyond

The Orange County foreclosure process was made more complex, due to a new state law requiring lenders to provide more information to potential loan defaulters. On July 8th, 2008, California Governor Arnold Schwarzenegger enacted California Foreclosure Law SB 1137 - with additional foreclosure notification requirements activated sixty days later. This law required lenders to educate homeowners on more of their rights during foreclosure.

Traditionally, the Notice of Default (NOD), is the first phase of foreclosure, usually filed after borrowers miss three monthly payments. The new law requires lenders to make contact with homeowners to assess their financial conditions and consider options to avoid foreclosure, before issuing a NOD. Once contact has been made, the financial institution can issue a NOD thirty days later.

Furthermore, borrowers must be informed of their rights to request another meeting - which would occur within 14 days of the request. This law places more responsibility on lenders to assist homeowners in keeping their homes.

Due to increased paperwork and time investment by the financial institution, the number of NODs has declined from 162 NODs on one day, before the law was enacted; to only 18 NODs, after the NOD became law.

Some believe the law's effect on the number of foreclosures may be minimal over time - simply lengthening the foreclosure process. Lawmakers hope that increased education will lead to fewer foreclosures.

Certainly, as Orange County unemployment increases, the continued underlying economic problems suggest that the O.C. real estate market will remain stagnant even after the new law's passage.

Adam Brett
RE/MAX NOC
Fullerton, CA

www.RealtorAdam.com
800.977.ADAM

Orange County's foreclosure threat grows. Increasingly, people are realizing that the housing market woes are not isolated events, but reflect an endemic fundamental problem in the world economy.

Simple economics teaches that supply and demand must establish an equilibrium in the market. For a long time, unimaginably easy "credit" conditions (mortgages established for no money down) created a massive real estate bubble.

Housing supply remains very high. Demand is decreasing, due to higher unemployment rates and a declining economy. Psychologically, more people are fearful about their economic futures.

Housing statistics try to predict future housing realities. One of these statistics is the Notice of Default (NOD), which is filed by the bank "after a homeowner misses three or more monthly payments."

This NOD is usually, the first step in foreclosure. Not all NODs foreclose, but higher NOD numbers reflect a higher future foreclosure possibility.

DataQuick, ForeclosureRadar.com and RealtyTrac.com all noted spikes in the NOD for August 2008, compared to July 2008. This suggests that O.C.'s foreclosure threat grows.

Orange County real estate still remains amongst the highest priced in the country. Market conditions demand lower prices to match demand.

Orange County homes have seen mortgage price reductions at foreclosure auctions of 30% in August 2008. This compares unfavorably to 3% (a year ago in August 2007) and 28% (a month ago in July 2008).

This shows that O.C.'s foreclosure threat grows.

Altera Real Estate's Steve Thomas has said recently that Orange County was offering the smallest amount of homes available in the area in 18 months. With only 12,940 homes up for sale, the current listing is 27% lower than it was a year ago, and 16% lower than that of two years earlier. The data as of October 2, 2008 was as follows:

S lice Listings Pending Time (mos.) 2 wks. ago 1 yr. ago

•$0-$500k 6,441 1897 3.40 3.41 13.65

•$500k-$750k 2,509 561 4.47 4.24 15.64

•$750k-$1m 1,421 325 4.37 6.16 15.88

•$1m-$1.5m 1,014 111 9.14 8.94 22.56

•$1.5m-$2m 614 35 17.54 14.14 17.77

•$2m-4m 751 44 17.07 16.06 26.06

•$4m+ 344 6 57.33 34.30 23.91

All O.C. 12,940 2,847 4.55 4.43 15.96 

The housing inventory reached its peak in April and fell 17% since that time. In contrast, it increased 37% in the same time period during 2006, and 20% in 2007. The demand for houses, however, is rising and the demand for houses went up 156% from last year, and 43% from two years ago. 

The above table shows "market time", which is the time it would take to sell all the listed homes, in theory that is. Under this theory, home owners would take all available houses in 4.55 months versus 4.43 two weeks ago, and 15.96 only a year ago. Homes under a million dollars have a market time of 3.73 months where as 13.89 months for homes over a million. More detailed findings are shown in the above table.

Name: VC

Cage #: A0913568

Breed: Domestic long hair

Age: 3 yrs

Sex: Female

This week’s featured Pet of the Week for the City of Fullerton is “VC” a three year old, spayed female, black and white, domestic long hair, ID# A0913568. “VC” is a staff favorite here at OC Animal Care. She is a gentle cat who loves to show affection and cuddle. Come visit “VC” today in person or online at ocpetinfo.com and make her your new companion today!

Last week’s Pet of the Week “Ezra” is enjoying her forever home!

If this is your lost pet, or you are interested in adopting this animal, please call 714-935-6848.

Foreclosures are adding up across a wide swath of Orange County, though ZIPs in the county's core are showing the highest concentration of foreclosures. They also happen to be where sub-prime lending was rampant during the housing boom. For Example, Santa Ana's 92701 had the highest concentration in the county in the second quarter, or roughly 23 foreclosures per 1,000 houses and combos. This map shows foreclosures per 1,000 homes in each ZIP from April to June.

Come Join us for the 21st Annual Police K-9 Benefit Show.

On October 11, 2008.  The show starts at 6:00pm.

Held at Glover Stadium - 1151 N. Anaheim B;vd. - Anaheim, CA 92801.

For Tickets or advertising please visit:  www.ocpca.org or call 714.227.8886.

Adam Brett
RE/MAX NOC
Fullerton, CA  92835
714.496.8116
www.RealtorAdam.com

If you are thinking of buying Real Estate in Orange County and want a pet friendly realtor, just give me a call.