Foreclosures, Santa Monica and more broadly

August 13, 2007 at 8:57 am 3 comments

There was a good article in the Los Angeles Times yesterday about foreclosures in the current market. [Please cut-and-paste links into your browser window if clicking on them does not work.]
http://www.latimes.com/news/printedition/la-fi-vacant12aug12,1,7541496.story

Digging past the headlines and into the data shows that the pictures is troubling in the periphery around Los Angeles, lower cost areas where Buyers made purchases with sub-prime loans and/or with little in the way of down payment. Palmdale/Lancaster, San Bernadino, and Riverside are the foreclosure hot spots.

The article also provided a nifty link where you can check on foreclosure activity by zip code: www.latimes.com/news/printedition/la-foreclosures-db,1,7647466.formprofile
I checked out Santa Monica for April-June 2007 and the number of foreclosures were as follows:

90401: 0

90402 (north of Montana) : 0

90403 (north of Wilshire) : 3

90404: 0

90405: 2

A total of five foreclosures for one quarter. More than we’ve had in the past several years in all likelihood buy hardly equivalent to the 40-100 or more foreclosures happening in the more distressed areas and not consistent with some of the doom-and-gloom headlines.

Certainly there will be more foreclosures while it takes time for the lending crisis to burn itself out. But Santa Monica in particular and the Westside in general are going to continue to experience a much more stable picture than other parts of the Southern California region. One of the many selling points about Santa Monica has been that properties here appreciate more in an “up” market, decline less in a “down” market and I see no reason for this pattern to change.

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Entry filed under: Market Conditions.

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3 Comments Add your own

  • 1. TSmith  |  August 13, 2007 at 9:27 am

    I work for a foreclosures website and have seen a huge increase in the number of foreclosures in the past 7 months. I believe it is a combination of not only sub-prime and ARM mortgages, but also the high number of people who have gotten loans with interest rates at an all time low… in addition to the rapid depreciation in some areas and the difficulty some are experiencing in selling their homes.

    Reply
  • 2. santamonicarealtor  |  August 13, 2007 at 9:55 am

    Hi, TSmith. Thanks for your comment.

    But I don’t see how just a high number of people getting loans at low interest rates leads to foreclosures.

    Depreciation in some areas is explained by Econ 1: Supply and Demand. Where you have 100 foreclosure properties come on the market and fewer than 10 sell in the same period, as has happened in parts of the Inland Empire, prices are going to be under pressure to drop. But that has nothing to do with the fact that loans were at low interest rates per se.

    By the way, I edited out your the link to your website. I’m not going to allow links to businesses, services, information sources, or individuals that I’m not personally familiar with.

    Reply
  • 3. Real Estate For Sale In North Georgia  |  March 20, 2008 at 3:12 pm

    Sounds like the perfect place to buy a house with the best chance for resale and making a profit and not loosing money. I see many pocket like this and it is just the areas which are already in financial distress that suffered extreme sub prime defaults as is the luxury homes due to just not planning and buying more than they could afford.

    Reply

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