X Files: Foreclosure Crisis Feed

Foreclosure Watch: How Many Houses for Sale?


In the Pacifica Tribune (6-24-09) a local real estate agent ran a full-page ad in which one column was headed "Real Estate and Loan News." She asserts, among other things, that: "Inventory is Low ... Currently there are 47 single family homes for sale in Pacifica down from over 100 this time last year. ... Today there are only 4 bank owned properties on the market." But according to RealtyTrac, a Southern California company that tracks foreclosures, there were 60 bank-owned properties (REO) as of June 21, 2009, in Pacifica’s 94044 zip code. Since then, the number has declined to 56, indicating a huge "shadow inventory" of REOs in Pacifica if banks are not putting them on the market.

How Big Is the Problem?

The chart below is a record of Pre-Foreclosure Notices over the past two years published in the Pacifica Tribune. The data are for the northern San Mateo County cities of Pacifica, San Bruno, Daly City, South San Francisco, and Brisbane. The data are incomplete because these notices may be published in other newspapers of record such as the San Mateo County Times.


(click chart to enlarge)

Estimates are that between 40 percent and 80 percent of these houses in pre-foreclosure progress to the auction stage of the foreclosure process in San Mateo County. RealtyTrac’s data provide a more complete picture of the problem of homeowners in trouble. Pacifica has seen a large increase in pre-foreclosure notices and foreclosure auctions since the last quarter of 2008. The figures are from the latter part of each month cited:


              Pre-Foreclosure    Auction 

Oct. 08             81                     15
Nov. 08            62                     21
Dec. 08            59                      24
Jan. 09             63                      22
Feb. 09             67                      17
Mar, 09             91                      22
Apr. 09            106                    34
May 09            108                    52
Jun. 09             125                    57

The problem is that unsold inventory appears to be rising rather than falling. An increase in the foreclosure rate could indicate further downward pressure on house prices.

Foreclosure Watch: Old County Road Empties Out


This building at the north end of Old County Road has a half-empty front and the sign advertises spaces from 256 square feet to 6,000 square feet.


The north corner of Old County and Rockaway Beach Avenue lost a clothing boutique recently and the second-story space above sits vacant.


This former restaurant has been vacant for a while. It is for sale for $2.75 million, with plans for a massive new building on the site approved.


Walk one block to the west onto Dondee Way and see a real sign of the times. This former jewelry store has a new office with a sign outside that reads "Bank Owned & Foreclosures...Ask for FREE List...No Better Time to Buy!"


Foreclosure Watch: Prices Plunge, Sales Up

July data from DataQuick indicate that the number of real estate sales in Pacifica rose 6.7 percent from one year ago, while the median price here dropped to $550,000, a 23.2 percent decline from one year ago.

In the Pacifica Tribune legal notices, foreclosure auction notices hit an all-time high of 73 in the first week of September but have declined sharply to a low of 40 this past week. That is the lowest level of trustee auction notices since the first week of May 2008.

The highest price paid for a house in Pacifica in July was $1,105,000. Despite that sale, the average per-square-foot sale price in Pacifica declined 30.3 percent, year to year, to $396 in July. It is now one of the lowest prices in San Mateo County.



"We Deserve It" Dividend: Bail Out the Little Guy

I’m against the $85,000,000,000.00 bailout of AIG.

Instead, I’m in favor of giving $85,000,000,000 to America in
a We Deserve It Dividend.

To make the math simple, let’s assume there are 200,000,000
bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+  into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a
We Deserve It Dividend.

Of course, it would NOT be tax free.
So let’s assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.
That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.
A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage – housing crisis solved.
Repay college loans – what a great boost to new grads
Put away money for college – it’ll be there
Save in a bank – create money to loan to entrepreneurs.
Buy a new car – create jobs
Invest in the market – capital drives growth
Pay for your parent’s medical insurance – health care improves
Enable Deadbeat Dads to come clean – or else

Remember this is for every adult U S Citizen 18+  including the folks
who lost their jobs at Lehman Brothers and every other company
that is cutting back. And of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it...instead of trickling out
a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!

As for AIG – liquidate it.
Sell off its parts.
Let American General go back to being American General.
Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.

Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.”

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion
We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC .

And remember, The Davis plan only really costs $59.5 Billion because $25.5 Billion is returned
instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.
Kindest personal regards,
A.C.Davis, A Creative Guy & Citizen of the Republic                                                                                                                                                                                                
PS:  Feel free to pass this along to your pals as it’s either good for a laugh
or a tear or a very sobering thought on how to best use $85 Billion!!

Foreclosure Watch: A Rising Tide of Misery

The Pacifica Tribune has been chronicling the growing problem of foreclosures in northern San Mateo County for some time now. But you'd have to look in the legals to see it. The paper accepts legal notices from Pacifica, Daly City, South San Francisco, San Bruno, and Brisbane.

Starting in the summer of 2007, the legals began lengthening in a way I'd never seen before. The weekly auction notices now stretch on for four-plus pages every Wednesday, dwarfing what's left of real estate ads.

How long will it be before the majority of real estate deals are foreclosures and/or banks selling houses they never wanted to own in the first place? In the Central Valley, that is already a reality.

In the chart below are numbers of auction notices in the Pacifica Tribune since July 2007. It is not complete, but you'll see the trend clearly enough.



Foreclosure Watch: Will It Happen?

According to REALTY TRAC, 270 Rockaway Beach Avenue (the old Romano's/Horizons restaurants) is in default of $1, 237,500.

A pre-foreclosure process has started.

I guess the question has to be asked about the scheduled teardown and rebuild of the building: Will it happen?

This might explain the mayor's falling all over himself to ask if a height variance could be granted on this project without a properly noticed variance and hearing.


"Before the Deluge" Sale Prices

Pacifica currently has 37 listings lower than their last sale price. The most drastic haircut is on 397 LYNBROOK. This home was just listed today and it’s $310K off its last price. Check out these RAW DATA.  This kind soul has provided us ordinary folks with a view into the Multiple Listing Service (MLS). Some amazing price declines here. Also, here is a very interesting CHART courtesy of "San Mateo Home Sellers in Trouble."   


Opinion: Home Price Data Flaws Alleged

Home-price data has its flaws
Market anomalies painting skewed picture, index producers acknowledge
By Chris Pummer
Last update: 7:28 p.m. EDT May 1, 2008
SAN FRANCISCO (MarketWatch) -- Commonly cited measures of U.S. home prices are overstating the degree to which the vast majority of Americans' home values have declined in the last year, producers of two of the most widely tracked indexes acknowledged this week.
Top officials with the National Association of Realtors and Standard & Poor's, which issues the S&P/Case-Shiller Home Price Index, agreed this week their monthly reports are giving imprecise readings of price changes at all levels -- national, state and regional -- due to rare market conditions that are skewing survey results.
The NAR reported last week that U.S median home prices fell 7.7% in March from a year ago. The decline resulted largely from a market anomaly -- a steep decline in costlier home sales due to tighter lending standards and high jumbo-mortgage rates, coupled with a foreclosure-driven spike in cheaper homes.
"If there are a lot more homes sold on the low end and fewer on the high end, the median price is bound to drop dramatically," NAR Chief Economist Lawrence Yun said. "In normal times, a median price would reflect typical homeowner equity changes, but these are not normal times. The jumbo (mortgage) market is frozen and the buying activity is more concentrated in lower-value homes."
The S&P/Case-Shiller index, which Tuesday posted a 12.7% decline for February, is skewed for two reasons of its own -- it tracks just 20 major markets, many among the hardest hit, and its "repeat sales" survey by design pulls in individual homes both bought and sold in the last few years. Many of those are now being dumped by distressed homeowners and investors who bought at peak market prices and face higher mortgage-rate adjustments.
A widespread problem
The misleading home-value figures are just one example of recently sketchy readings of the U.S. economy. U.S. consumer-confidence readings, for instance, have been wildly divergent.
The Conference Board's closely tracked index Tuesday showed confidence falling in April to its lowest since the eve of the U.S. invasion of Iraq in March 2003. A University of Michigan survey incorporated in the U.S. Index of Leading Economic Indicators last week rang in at its lowest level since November 1982 --when the country was suffering through 10.8% unemployment and the worst recession since the Great Depression.
That 26-year-low confidence mark grabbed headlines nationwide while the Conference Board number that many economists find equally reliable drew far less media attention. Not one journalist who contacted Conference Board Communications Director Frank Tortorici's office Tuesday inquired why there was such an astounding discrepancy, he said.
NAR's Yun said the financial media is seizing on gloomy numbers and providing little analysis or historical perspective. He freely admits NAR's readings aren't accurately reflecting what's happening with home values for the overwhelming majority of Americans.
"Like any economic measure, it can be imprecise, and it is especially so now," Yun said.
Grim reapers
As reported Tuesday, the S&P/Case-Shiller Home Price Index's12.7% decline in February was the largest drop since its creation in 2001. Despite that index's limited seven-year history, the Associated Press reported that home prices "plunged by a record" percentage and "at their fastest rate ever."
The glaring discrepancy in this case is that 17 of the 20 metro areas posted record annual declines, and yet 78% of the 330 metropolitan regions that NAR tracks reported price increases in the latest period -- and that despite the acknowledged downward bias in current price readings.
S&P Index Committee Chairman David Blitzer acknowledged his organization's overall and metro-market readings paint an incomplete picture. For that reason, he said, the report now charts price changes in 17 of the markets at three specific levels - low-, mid- and high-priced homes -- to provide a clearer assessment.
In the high-priced San Francisco area in February, for example, homes priced below $512,000 fell 32% in value from a year ago, while homes priced from $512,000 to $750,000 fell 21% in value and those over $750,000 fell 6%.
"The homes that had the biggest run-up and biggest run-down more often than not are the least-expensive homes," said Blitzer, S&P's managing director of portfolio services.
Yun said the S&P/Case-Shiller Index is flawed because "if you focus on down markets you're going to get a downward price. We are disappointed that its very limited market coverage gets such attention."
Conversely, Blitzer said the NAR figures are faulty because "it's well understood that a median is subject to sharp swings in the sample. The only plus is that it's easy to compile using inexpensive computing resources. If I had 88 years of data, I wouldn't want to change (methodologies) either."
In both cases, pockets of severe price declines in local markets are skewing figures, Yun said. If homeowners want to determine their property's value, it's never been more critical to take the measure of recent sales by home-price level in their town or city neighborhood.
"Just like saying the average nationwide temperature today is 57 degrees doesn't tell you anything, the same is true for real estate prices," Yun said. "The only way to tell what your own home is really worth is to look at local-market conditions, do Internet research and utilize professionals (such as licensed appraisers) to help determine the value of your home."
Chris Pummer <mailto:cpummer@comcast.net>  is a former senior editor for MarketWatch and Bloomberg News and a reporter for such papers as the Los Angeles Times and San Jose Mercury News.

[submitted by Cyd Crampton]

Foreclosure Watch: Palast on Bailouts

Investigative reporter Greg Palast (BBC News Night, UK Guardian) tells it like it is. For those still laboring under the delusion that it was "all the borrower's fault," read on. 



The $200 billion bailout for predator banks and Spitzer charges are intimately linked.

By Greg Palast
Reporting for Air America Radio’s Clout

While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators. Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

Download palast.doc to read the rest of his story.

Foreclosure Watch: Pacifica Prices Plunge

This former real estate office in Pacifica's Manor district stands empty after decades of continuous operation under various brokerages.


On a quiet working-class street in the north end of Pacifica, Calif., a microcosm of the housing crash is evident in publicly available data.

Forest Lake Drive is a street much like others in the area, but there are several foreclosed, bank-owned (REO) properties in close proximity. The houses are unremarkable: 3-bedroom, 1-bath ranchers with a narrow one-car entrance garages. Jet airplane noise screams overhead; the neighborhood is in the flight path out of SFO.

The house at 634 Forest Lake Drive has been for sale on redfin.com for 255 days to date. It was first listed in June 2007 for $649,000. In October, the price was lowered to $599,000 and last month it  dropped to $499,000, for a total decline of 23% in less than a year. Property tax figures indicate that this property was not bank-owned (REO).

The house at 641 Forest Lake Drive has a more interesting history: It was sold for $660,000 at the end of 2005. The property "sold" again in March 2007 for $574,995, a decline of 13%. In July 2007, it was listed in the Pacifica (Calif.) Tribune as a lender-owned property for sale at $599,900. Then it "sold" again in October 2007 for $545,000, for a total decline from 2005 of 17.5% .

But that’s not the end of whatever type of deceptive story this is: In the January 23, 2008 issue of the Tribune, this property was listed for sale at $511,900, a total price decline of 22.5%.

The weirdest story is 637 Forest Lake Drive: In November 2006, it sold for $655,000. It was "sold" (probably foreclosed on) in September 2007 for $554,286. In November of the same year, it was listed for sale at $519,900 and there began a series of price declines that now stand at a listing price of $474,900. The total percentage drop since the peak of the market: 27.5%.

Why would anyone buy a depreciating asset that is dropping by $10,000 every two weeks?

The real estate/mortgage/lender industry has a lot to answer for. There is evidence of concealment and obfuscation of the real state of affairs in real estate.

What is property really worth in this cratering market? When are y’all going to come clean?