Posts Tagged ‘Foreclosures’

Foreclosures Statistics for High-Foreclosure Areas in Sacramento County

The number of foreclosures in Sacramento has been the subject of many articles and a great deal of press attention. I thought I’d take a look at a few of the areas that are experiencing a high number of foreclosures to get a feel for how many foreclosures are currently active and what sort of discount they represent for buyers.

With this in mind, I focused my research on the three areas that are showing highest numbers in the Multiple Listing Service (raw numbers, not percentages) of bank owned properties in Sacramento County. These areas the Franklin Blvd / Freeport area (95823 — see zip code map), Sacramento Florin 95828 (map), and Elk Grove 95758 (Map). In fact, when you look at the map, you can see that the choice of calling these “three areas” or “one area” is pretty arbitrary, since they roughly border one another.

The Boring News — How Many Are There?

Let’s take them as one area of Sacramento County that’s high in foreclosures first. In these three high foreclosure areas, the number of active listings that are bank owned, is 17% of the total. At the same time, 11% of the total listings are short sales — properties where the seller’s proceeds from the sale do not cover the cost of repaying the loan. So for both types of “distressed” properties, we come up with a figure of 28%. Once again, the Sacramento Bee’s summary claim that for every two homes sold, one is in foreclosure seems to overstate the case. (I critiqued those numbers from another angle here). However, to give the bee their due, here are possible reasons for the discrepancy:

  • The Bee was reporting on August foreclosures and sales only, whereas my current report concerns active listings that have accumulated over some time.
  • As we’ve shown earlier in one market, foreclosures outsell non-foreclosures. This isn’t hard to understand — they’re cheaper. This being the case, you’d expect the “absorption rate” for short sale and REOs to be faster than for non-distressed sales.

The Interesting News — How Much Money Can You Save?

Of course, the debate about how many foreclosures there are generates a lot of heat, but not much light. A much more interesting question is, as always: “What’s in it for me?”

If you’re a buyer, plenty!

The following numbers are all expressed in list price per square foot.

In the Franklin Blvd area (95823), short sales are presently discounted 9.2% from their non-distressed counterparts. Bank owned properties are even better, discounted an average of 15.5%. In Elk Grove (95758), the average discount for a short sale is 11.9%, while for an REO it’s 17.1%. The Florin area boasts some of the best numbers of all in this respect. Short sales are discounted 12.4%, while the average foreclosure is discounted a tasty 18.3%! If you’re willing to put up with doing whatever repairs are needed yourself, that difference is huge, and it means the difference between purchasing something at roughly $320,000 and roughly $260,000. $60,000 buys a lot of carpet and paint!

Sacramento County Short Sales Listings Available

Recently I’ve been reworking the foreclosure area of the web site and — as promised earlier — I’ve added a page of links where you can browse Sacramento Short Sale Listings. If you’re unfamiliar with Short Sales, what these are are sales where the sellers are “short” in the sense of not having enough cash to sell, pay closing costs, and pay off the lender(s) they owe. So what happens is that you have to get approval from the bank, a process which is fairly time consuming.

That said, there are some bargains to be had in short sales, but (as we recently showed for Antelope and we’ll examine further in a future article), on average the discounts are better on bank owned properties.

Sacramento Real Estate Market – Antelope

Antelope’s real estate market is one where a large number of short sales and foreclosures are driving prices down. Our foreclosure list puts Antelope at number six in our unfortunate hit parade of high foreclosure areas. Between them, short sales and foreclosures make up slightly more than half of the available inventory in Antelope. There are 500 active listings in Antelope at present, of which 103 (20.6%) are bank owned, and 150 (30%) are short sales.

In August, the average home sold in Antelope fetched $302,588, 18.3% less than last year’s average of $370,212. Some of that difference was size related, with this year’s home coming in 5.5% smaller. The average sold price per square foot dropped somewhat less, therefore, 13.5%, from $215.24 last August to $186.09 this August. The median price was down 16.9%, from $361,200 last year to $300,000 this year. Units sold were down from last year’s 62 units to 46 units this year, a 25.8% drop.

Interestingly, though short sales in inventory outnumber bank owned properties, when you look at what sold, the numbers are reversed. Though bank owned properties (REOs) make up 20.6% of the inventory currently, they represent 32.6% of the sales in August. Conversely, short sales make up 30% of active inventory, yet accounted for only 10.9% of the sales in August.

This difference is not surprising given the price discrepancy. Looking at the current list price in Antelope, homes that aren’t short sales or foreclosures average $200.41 per square foot, while short sales are priced 9% less at 182.42 per square foot. REOs are priced even lower, 15.0% less, at $170.43 per square foot. In addition, most agents probably feel that REO sales are a bit less problematic, so to the (limited) extent that buyer choices reflect our opinions, that may have something to do with this as well.

To view current REO properties in Antelope, click here. We do not yet have short sale listings available yet directly on our web site (except mixed in with other listings), however please feel free to contact us if you’re interested in listings from this (or any other) custom search. To view all Antelope listings, click here. We’ll have short sale listings coming soon and will post links when they’re up.

Sacramento Foreclosure Listings

We’ve put up a new section on the web site dedicated to listings of Sacramento foreclosures. Here we have a complete list based on the MLS that we’ll update every week or so of bank owned properties (also known as REO or “Real Estate Owned”) throughout Sacramento County. Those areas with no foreclosures in inventory don’t appear here — those that do are arranged in order from the areas with the most foreclosures on top, on down.

The current page is a kind of “browse” interface, but I may also put together a minimal sort of search interface on top of this as well, probably featuring price range and area to start out with.

As far as I know this is the only complete and free list of foreclosures available in Sacramento. All the properties here are listed in the MLS and so are available to buy now.

The queries are a tad on the slow side but are not too bad. If it gets too painful I may go ahead and do some tweaks to optimize that. Let me know if you have any problems using the list — otherwise enjoy! Let me know if there’s any particular statistical data that might be useful, and if it’s not too heavy on the rocket science I’ll put it together.

Sacramento County Real Estate Market — Got REO?

Residential real estate sales in Sacramento County in August were sluggish compared to a year ago at the same time, with a noteworthy number of the sales being made up of bank owned properties. The average home that sold in Sacramento County in August was a 1717 square foot home that listed for $374,731 and sold for $364,256, or just over 97% of list price. The average sale price was down 11% from last year’s average sale price of $409,081. At $325,000, this August’s median sale price was down 12.2% from last August’s median of $370,000. Sold price per square foot was down 12.7%, from $242.92 last year to $212.15 this year.

Unit volume was down 30.4% from last year. Last August, 1216 units sold, while this August, the number had dropped to 846. The expired to sold ratio rose from 77.2% to 106.3% — i.e., more homes expired in August than sold.

All around, August wasn’t a great month.

In my opinion, the real story that stands out in August is the number of foreclosures. Last August less than one per cent of the homes that sold were REOs (“Real Estate Owned”, i.e., bank owned properties). This August that number has risen to 25.3%.

Bank owned properties are selling faster than non-bank-owned. Though REOs made up 25.3% of August’s sales, they comprise 16.2% of active inventory. So clearly they’re outselling non-REO properties, even though they’re often sold as is.

There’s a good reason for this, of course: price. Recall our average sold price per square foot in August: $212.15. If we break that down between REOs and non-REOs, we get $177.10 for the bank owned properties and $222.49 for the properties that are not bank owned.

The difference in price between REOs and non-REOs works out to something just over a 20% discount.

We have more of them.

Let’s go shopping.