Saturday, October 4, 2008

Santa Monica Foreclosures Creeping Into the Westside

Immunity? Don't believe the hype. The fact is, foreclosures are now making their way into affluent areas of the Westside. Within the past couple years, we have heard about foreclosures in the outlying areas of Los Angeles. As the mortgage meltdown progresses, it is reaching inward toward the city. Let's focus on Santa Monica foreclosures, taken from data found on Realty Trac.


(136) Total Foreclosure Activity - Santa Monica

PreForeclosure (72)
Auction (20)
Bank REOs (44)

Broken down by Zip Codes, we see:

90401 (4)
90402 (10)
90403 (34)
90404 (42)
90405 (46)

The number of foreclosures along with unsold inventory are the most important numbers to watch during this part of the real estate cycle. Keep in mind, banks probably have significant REOs that aren't showing up on the MLS. Once they start releasing their inventory, while Alt-A, I/O and ARM Loans begin resetting in 2009, prices will drop considerably.

In the Real Estate Tools/Data Sites section of this blog, you have many websites at your disposal. Zillow, Melissa Data, Dataquick, Redfin, Realty Trac, and Foreclosure Radar are all there to assist you in market research. Become your own expert and look at the data. Westside markets are changing, even in Santa Monica.

28 comments:

Anonymous said...

This doesn't tell you anything....Break it down by SFR vs/ condos.

All of these have to be (or at least a huge majority) condos....or crappy tear down houses under the freeway overpass....

Anonymous said...

Shutup and get your head out of the clouds, and learn to accept the reality of whats going on.

Anonymous said...
This comment has been removed by a blog administrator.
latesummer2009 said...

Try to keep your comments constructive or you will be deleted.

Anonymous said...

I think these are some of the most important numbers to track over the coming months/years. They will be the leading indicators of the health of the Westside.

I hope you keep a good track of these that can be presented in a chart form over the coming months.

I enjoy the site. Keep up the good work.

Anonymous said...

latesummer please delete that jackass's comment he obviously has no intention to understand the reality All he wants to do is piss people off hes probably some stupid little kid messing around

Anonymous said...

You really should disable comments comments enable neanderthals to post irrevelant bullshit 90% of all websites that have comments the comments are retarded especially youtube your doing a good thing reporting all this if people want to contact you it should be through email or open up a forum and delete the idiot comments=)

Anonymous said...

Hey late, did you see the article about 3.5billion going to California homeoweners. It said something like it wants to help the idiots that helped cause this mess. Why should they be rewarded with keeping the home they could never afford in the first place? What will this do to the market, and how can it return to an equillibirum if prices can't fall? "due to lack of loan resets etc..." Thats probably one of the most socialist things i've ever heard, thank you stupid government.

latesummer2009 said...

My question is who would want to stay in one of those loans when the home was purchased at a high price and they are increasingly going underwater. It really is nothing more than a small settlement from BOA to swallow up Counrtywide.

It really is too little too late.

Anonymous said...

By too late, do you mean those jerks are going to get foreclosed like they should?

Anonymous said...

"Libor Rise to Boost Subprime ARM Defaults 10%, Citigroup Says"

"Signaling a worsening financial and mortgage-led crisis, economists with the International Monetary Fund said Tuesday they now expect mortgage-related losses substantially above the $945 billion estimated in April. In the IMF’s latest Global Financial Stability Report, officials said they now foresee losses as large as $1.4 trillion."

latesummer2009 said...

What I meant by too little, too late is, the perception that something is being done to solve the mortgage mess. The only solution is to let it all wash out. The sooner the better. It will be painful, but no quick fix is going to help. I would rather see a quick painful decline than a slow grinding down of the market. Everything they have proposed has failed and will continue to do so. There are a series of badloans starting with subprime, Alt-A, I/O and ARMs that have to be worked through.

Foreclosures-Price Drops-More Foreclosures-More Price Drops-and Finally Reasonable Historical Normal Prices.

People don't want to hear it, but I venture to say a SFR starter on the Westside will be in the 300s when were through.

Tough times ahead...

Anonymous said...

Great=D thats the way it should be the bubble days are over people bidded up the Westside beleiving it was immune to a price correction we'll see how they feel now when they lose their ass haha Real estate= something you live in NOT AN INVESTMENT

Anonymous said...

I just got an 'offer' from the feds (they took over my mortgage at IndyMac) for a loan modification that would bring my mortgage to 4.5% and spread the terms over 50 years....wow, this bailout thing is looking good to me now....

Anonymous said...

Dear Bailed Out,
It was people like you, along with banks, brokers, appraisers and Wall Street, who caused this big mess I now have to pay for through no fault of my own. My only consolation is in knowing you will be overpaying for a house, and in a mortgage for the rest of your life. If you want to sell it good luck with when you will break even. Maybe when it is time for you to go to an old folks home. I will now purchase a home with 20% down and have it payed off in 20 years.

Anonymous said...

Well said Anonymous oct 9 338 pm, even though that guy is being "helped" their are too many distressed people in these cities the government can't save them all=).

Anonymous said...

Hey Late, how low will Westside areas fall? I know the majority of those areas are upper middle class, and an upper middle class person isn't going to throw 1.5 million on a 2k sqft shack that 3 years ago was half the price. Also, do you have any idea whats going on with Burbank, Pasadena, Woodland hills or Calabassas. Are they full of the same toxic loans the Westside has as well? reason Why I ask, is that those areas don't seem to have gone down that much at all pricewise. What will make then correct in price?

latesummer2009 said...

I believe a starter single family residence (SFR) on the Westside will eventually be in the 300s when the market bottoms out. That is over 50% off the peak (2007).

This summer will bring on some eye-opening price cuts in the most affluent areas here. Too many negatives in the market to believe otherwise.

Anonymous said...

That goes for all those other places I mentioned as well?

latesummer2009 said...

Yes, take peak pricing in your area and cut it in half.

Anonymous said...

How much should I knock off from the O.C towns, including the beach areas which have yet to be crushed.

Anonymous said...

I think these are some telling sales figures from San Diego. Their bubble peak was slightly off from LA...

http://www.bubbleinfo.com/2008/10/major-squishdown/

The number of detached sales by price range (Sept 15th through Oct 3rd)...

$1M+ 131 ('06) 80 ('08) -39%
$750-999k 114 ('06) 92 ('08) -19%
$600-749k 189 ('06) 109 ('08) -42%
$450-599k 395 ('06) 199 ('08) -50%
$300-449k 201 ('06) 477 ('08) +137%
$200-299k 8 ('06) 364 ('08) +4450%
$1-199k 3 ('06) 140 ('08) +4666%


For the period, sales are up over the past few years, but that's only because of bottom feeders. Good luck selling at the high end!

Mind you that this was before the current, worldwide market plunge.

Anonymous said...

San Diego Peaked before LA/OC, the low end may be affordable now but the high end hasn't crashed yet but it will...

latesummer2009 said...

Great info. It appears people will buy when prices make sense. A lot of pent up demand. BUT, they are getting more and more educated in buying foreclosures as the low end has adjusted to more normal pricing. The middle and high end tiers will experience the same price declines and sales will then increase. All over Southern California, even coastal areas.

Anonymous said...

Yes, but only after the prices fall down to earth and are affordable for each area which they are not..

Fidelixi said...

Curious where these figure for REO come from. I am a real estate agent and track these figure and find 28 total REO's (for SFR and Condo) in all SM zip codes YTD through 9/2008.

latesummer2008 said...

Contact Realty Trac to find out more about their foreclosure tracking. My guess is, not all banks are reporting to the public information sites.

latesummer2009 said...

And so it begins...

2376 Dewey, SM
3+2 SFR

Sold 11/06 for $1.1 Million
Listed 10/08 for $709.5 Thousand
Foreclosed House

And to think Santa Monica peaked in 2007, so the value was probably higher than 1.1 million. This is the first real significant price cut in Santa Monica. The banks realize what is ahead and will now begin unloading property. This will in turn affect pricing in Santa Monica. I am sure they're shockwaves reverberating through the RE community in Santa Monica. Personally, I still think it is overpriced, but someone will buy it. Ultimately, this house goes down into the $400s as it reaches fundamental value according to rents and incomes.

I guess it really never was just subprime, now was it?