Posted on 08/09/2006 10:05:34 AM PDT by ex-Texan
Mortgage trouble is creating some of the biggest bargains this side of eBay, allowing buyers to snap up homes for tens of thousands of dollars less than what they might have paid just a few months ago.
"People are doing whatever they can to sell" in order to avoid foreclosure, said Brad Geisen, president and chief executive of Boca Raton-based Foreclosure.com. Notices of pending foreclosures are piling up, in what many believe to be the first wave of a trillion-dollar tsunami: The dollar volume of home loans with interest rates that will be ratcheted upward over the next several months.
New Palm Beach County foreclosure filings rose by 34 percent in June compared with June of last year, according to figures compiled by RealeSTAT.com, a commercial data service. Foreclosure.com's July numbers show a similar upward trend, not just for Palm Beach County, but for the state as a whole.
"It's just going to get worse and worse," said Jeff Pashkow, president and chief executive of Foreclosure Clinic, a Loxahatchee investment firm that buys homes before they are auctioned by the lender, and resells them.
Clients these days are from such well-to-do areas as The Acreage and Wellington, he said. "They're mostly (middle class) people who have financed it to the hilt, and there's really not much you can do for them."
However, Foreclosure.com's numbers also pinpoint the emergence of unlikely rescuers: bargain hunters. Nationally, almost one in every three homes at risk of foreclosure was bought in July, according to Foreclosure.com.
RealeSTAT.com's local figures show that even as larger numbers of mortgages slip into default, the number of homes actually going to auction is decreasing.
Unlike Texas, where a foreclosure can be final in as little as three weeks after the homeowner gets his or her first notice of a mortgage default, Florida homeowners get about six months between the time they are first notified they are facing foreclosure and the time the lender actually auctions off the property, said Geisen. "Longer if they play their cards right," he adds.
The smart money, said Brad Hunter, a real estate analyst with the West Palm Beach office of MetroStudy, "is ready to go looking for deals."
Such investors are usually first in line to carve profit out of a sale of distressed properties. But it's not just investors. Diane Corbin, a Realtor with Exit Realty Neighbors, said she's had calls from house-hunters asking whether a property was in foreclosure.
These "third-party buyers," said attorney Stuart Gitlitz, are elbow to elbow. "There are more than we have ever seen before, and I have been doing this for 20 years," said Gitlitz, a Miami attorney who represents lenders in Palm Beach County foreclosures.
Small wonder:
It's a fraction of the $582,000 average Palm Beach County home price in May reported by Trend Graphics.com, which compiles listings. And it is almost exactly the amount considered affordable for a worker earning the median income in West Palm Beach, according to the Florida Housing Coalition.
The fire-sale prices have their drawbacks. For one thing, the deals may be one reason new homes are sitting empty. The inventory of homes waiting to be sold in Palm Beach and St. Lucie counties is rising, said MetroStudy's Hunter.
Corbin, the Realtor, cites the case of a local developer who was selling a home a week — and who is now selling a home a month. "It's killing them," said Corbin.
The lure of a quick profit may also be attracting some of the same buyers who seized on buying homes and condos at the height of the market and flipping them. However, buying a home out of foreclosure can be more complex, said Foreclosure.com's Geisen; and diving headfirst into such deals can hurt inexperienced speculators the same as the downturn in housing prices.
Homeowners have reason to be cautious, too. It's not unusual for owners notified of a mortgage default to be swamped with unsolicited offers of help, said Gitlitz — some more genuine than others. "There is a lot of fraud going on," he said, one reason state lawmakers took steps this past session to tighten protections for homeowners willing to sell their property before a foreclosure is final.
Many homeowners are successfully unloading properties, adds Geisen. "Usually there's enough time for a seller to sell and get out."
ex-Texan!!!! There you are ya little scammer! Maybe I haven't been looking closely but I haven't seen a chicken little thread from you in a week!
Wow!
I thought that EVERYONE knew that home prices in California are higher tha prices in Oregon.
PLEASE BE ADVISED OF THE AFOREMENTIONED!
I think it's funny that you need to go to far-a-way places like Sunland, CA and the UK to "prove" that being a "renter" in Central Oregon is an "act of genius".
LOL.
over...
The 34% rise is from about 0.5% to about 0.67%.
House prices are still up year over year, substantially so. They went flat about November of last year and bottomed (very slight pullback) in February. They are flat to marginally up since then. Go to Zillow.com - we don't have to make these things up anymore.
The average American has 55% equity in their house.
US household net worth is $53 trillion.
The doomsters will tell you the world is about to end every day and twice on Sundays, but it is not only still here, but everybody and their brothers are richer every year. Like clockwork. Through every sort of technological change, every sort of political gale, through war and depression and inflation etc etc ad infinitum.
You can't sink the US economy. You can't even make a dent in it. It is a force of nature and it sweeps all before it, in majestic contempt for all the pundits on earth. Always has. Always will.
that's a joke, right?
Darn straight! Time to buy some property!
Wait until next year. And then 2008 will be a great time to buy foreclosures.
Looks like a knockdown to me ... but wait in that neighborhood ... leave it standing. What a HOT deal!
LOL!!!
NICE!!!
I don't prognosticate. I follow the markets fairly closely and at no time in the past 35 years or so have I seen any 6 month period when some "expert" hasn't forecast a "coming" recession.
With low interest rates, rapidly raising home values foreclosures were at historic lows, so the rise is inevitable. However, the Hurricane season and insane insurance costs has made the Florida market very sour.
That's California. That's what you get when the median home price is well over $600K.
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