Yikes! 70% Increase in Foreclosure Filings

Wow!  That’s a huge increase!  In California, we always go big, so it isn’t too surprising that while most areas in the rest of the country shows some declines, California experiences a huge spike in Notice of Defaults filed.  So, while shadow inventory is slowly shrinking, California is getting set-up for another tidal wave of bank-owned homes hitting the market.  This, inevitably, leads to price declines.  And this time it could be severe.  If a majority of those properties hit the market at the same time, we will see big declines.

To make matters worse, on October 1st (tomorrow), the high mortgage limits that we have been privy to will expire.  And with California’s high priced homes, many of us needed those artificially low mortgage rates.

This is not a healthy combination for the housing market in California.  It is going to get ugly, again. 

Photo Credit: Bank Owned Property by Mike Licht, NotionsCapital.com