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That time of Year, Predictions in Real Estate

December 27, 2011

Almost everyone is asking me “What do I hear from the banks?”  Well, nothing, we have been hearing very little.  Along with the robo signing debacle and government trying to help homeowners, we have unemployment which is literally the elephant in the room.  Banks are not releasing inventory or not continuing the foreclosure process over the holidays.  Trulia indicates that although current notices are down, there is a back log of homes that have not been started or are in process.   In addition, as long as people are not working, then homes cannot be purchased or refinanced.   At this moment, in our local market, we generally have less than 2 months inventory available for sale.  This is artificially driving prices up.  Foreclosure homes are actually selling in the same range, or just slightly above, as a short sale.  The more traditional owner occupied home with equity is selling higher than both.

So, if we have high unemployment, low inventory and a backlog of possible foreclosures.  In our market, and every market, is local, then who can say what will happen.   Based on the most recent data from Foreclosure Radar, both notices of default and actual sales are lower than previous years, but both have jumped and are close to the same November numbers last year.  I predict that we will yet again have a lackluster year with foreclosures coming back in March and April.  Prices may remain stable until we reach four to five months inventory then come down again but will fluctuate in some cities more than others, Brentwood will remain more stable, followed by Oakley, Discovery Bay and Antioch and Pittsburg.

Nov 11 Chart 2011

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