Stockton, California: 3/4 of Homes for Sale Are In or On the Path to Foreclosure, More Inventory Coming
June 4th, 2008I’m sticking by my New Year’s analysis that Fall ’08 is going to get very strange.
Via: Reuters:
In some areas of California, so many foreclosed homes are available to buy on the cheap that real estate agents are discouraging prospective sellers from even putting their houses on the market.
Perhaps the most extreme example of this is Stockton, about 85 miles east of San Francisco, where roughly three of every four homes for sale are in or on the path to foreclosure.
The city’s resale market is “pretty much gone,” said Cameron Pannabecker, owner of Cal-Pro Mortgage Inc.
“I don’t know an agent today who would take your listing unless you’re a hard-luck case. There is just too much competition,” Pannabecker said. Properties that at the peak of the market two years ago were selling at $500,000, or appraised at $500,000, are now selling for $200,000, he said.
And because foreclosures dot all areas of Stockton, buyers have their pick of properties, said John Knight, a professor of finance and real estate at Stockton’s University of the Pacific Eberhardt School of Business. “Honestly, there isn’t a huge amount of difference between a foreclosed home and a regular home than the prices,” Knight said.
Worse for people trying to sell their homes, lenders in possession of houses and condominiums may keep their fire-sale in full swing for months to come to attract investors to a market near the top of U.S. surveys of areas hit by foreclosures.
“It’s a tough market to be a normal seller,” said Stockton real estate agent Michael Blower of Blower Realtors. “I’ll really ask them, ‘Do you need to sell?’ Because your competition are banks who want to clean it off their books.”
Calling up listings on a database, Blower noted just over 3,500 of nearly 5,000 local homes listed for sale are in some stage of foreclosure. “There are more listings coming,” he added.
My friend just told me a story of taking the Amtrak bus through Stockton, and ‘downtown’, he saw a crowd of people by a food bank, and it seemed dramatic because people were crossing in front of the moving bus, and seemed to be running with boxes like a seagull trying to keep its morsel away from other gulls. It turns out that the ‘first come, first choice” nature of the charity explained this: http://ap.google.com/article/ALeqM5hput8LtBOaDqn_jKVLlQRIR2lMswD90TIJLG0
Stockton doesn’t really have a big industry.
My landlord just raised our rent $125 apiece yesterday because he realized he is losing money with ARMs renovating his 3rd house in Santa Barbara. Visiting Seattle, my friend’s landlord evicted his household from a large old home in Capitol Hill Seattle because he wanted to tear down for condos, but now that guy has a bunch of empty houses going for auction because he was late to the picnic and didn’t know what he’s doing. My friend actually did return illegally for a few months by holding on to the key.