That headline deserves a big "duh!"
The SJ Mercury reported yesterday that Silicon Valley foreclosure sales rose 15% in September and that Q3 affordability is down to 53% from 58% in Q2. Why? Prices are rising as low-end inventory is sold. New homes comes on and the prices are going higher.
This is in line with what I posted yesterday showing that sales volume is increasing and that in Los Altos, prices are rising.
The other factor is foreclosures - not much of an issue in Los Altos. There have been 17 Notice's of Default filed in Los Altos since January 1st. Most of those have been sold in the open market or resolved the issue with the bank. Only three (3) homes have become bank owned (or REO) in the same period.
Foreclosures increasing - I'll say no for two reasons. One, as values increase homes that are "underwater" drop - especially at the low end where prices are rising. Two, the stock market recovery means that people who had lost money earlier this year can sell assets to cover costs. When the DOW hit 6,547 on March 9th, a lot of people had investments so far underwater they couldn't sell to cover living expenses mortgages. Now that we're at 10,000+ they can.
My call is that we'll see fewer foreclosure notices in Los Altos and the surrounding area in 2010.
Here's the original SJ Mercury article:
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Bryan Robertson, CEO | T: 650.799.9951 | Email: email@example.com | Website: http://www.BryanRobertsonHomes.com |CA BRE# 01191946 | Catarra Real Estate, Inc | 171 Main St #220 | Los Altos, CA 94022