Foreclosure Update

The West is leading the way!!!.....except it’s not for a good thing, it’s in regards to foreclosures. August saw a considerable jump in foreclosure starts over July, which comes in the form of a notice of default or notice of trustee sale, depending on the state. This is unfortunate given the opposite has been true of recent and foreclosure starts were shrinking. In fact, every single state saw a rise in foreclosure starts in the month of August.

The Bank of America umbrella seems to be getting most of the blame for these troubles. Although other banks such as Wells Fargo saw increases, it appears that Bank of America is leading the way with an astounding 116% increase in August over July. On one hand this could be because of a back log that was created by various hold ups by both internal matters like simply working out the kinks in procedures as well as government hindrances often in the form of one new law after another. On the other hand, this situation could be largely due to the troubled economy and struggling citizens finally reaching their breaking point. It’s mostly like some sort of combination of both.

It takes, on the average, more than a year to complete the foreclose process. So in large, this increase won’t even likely affect the market for some time. It is, however, just another part of the constant challenges faced by the economic recovery. Until we’re able to gain control on upside down real estate, we will continue to struggle to make headway on a reasonable recovery.

In California alone, foreclosure starts increased by a whopping 69.5%! That’s the highest amount in a year. The figure wasn’t much better for San Luis Obispo County with an increase of 56.35% from July to August. Santa Barbara County, too, struggled with a 61.73% increase, and unfortunately also saw an increase of 6.50% over the prior year, 11.33% higher than SLO County.

Percentage wise in Santa Barbara County, Lompoc and Goleta take the cake with over 100% increases in foreclosures from July. However, it’s Santa Barbara and Santa Maria, numbers wise, which saw the most damage. They had over 50 and +/-100 foreclosures, respectively, in the month of August.

For San Luis Obispo County, San Luis Obispo and Arroyo Grande appear to be taking the largest hit in foreclosures. SLO topped 20 for the month of August which is up 61.54% from July. Arroyo Grande only increased by 37.50%, but that’s not necessarily a good thing since they too were at or about the 20 mark, the percentage wasn’t as high of an increase because their July figures were already higher than SLO’s.

The Silver Lining – One person’s unfortunate situation can be another person’s opportunity. The continual assembly line of foreclosures will help to keep home prices low. Low home prices and more foreclosures will help to keep interest rates at historical lows. Those who have the means can take advantage of this situation. Many people who even think they don’t have the ability to get into a home actually do have opportunities available to them. There are many programs available that allow people to purchase a home for very little down. Call a REALTOR, contact your Mortgage Representative, email your Financial Planner, and discuss your situation with them so they can help you figure out a game plan to help you reach your goals.

Zachary S. Johnson, REALTOR, www.805RealEstate.com