Are more distressed properties rearing their ugly heads again?

Question

Is it my imagination or are there really more distressed properties rearing their ugly heads once again in the San Diego market?

Could it possibly be time once again to start reving up the short sale and foreclosure fix and flip and buy and hold engine again?

I've been noticing some price reductions and a faint increase in foreclosure and short sale activity lately. In fact I've just bid on two of them and I'm about ready to bid on a couple more.

But yet to hear most RE professionals talk you'd think we're still in a sellers market buying frenzy. Kinda reminds me of the ole Mike Ferry Days whence when someone asked a RE Pro how biz was they would always reply F A N T A S T I C!!!

Is it time to start really leveling the playing field?

John Arendsen · Answer

@Jeff Rabinowitz, very interesting observation and very true. So many folks just biding their time who still can't afford the home they purchased in an over inflated market. Unfortunately many of these folks may still be underwater and have no choice but to buckle and butt out.

Jeff Rabinowitz · Answer

There may well be another surge of foreclosures entering the market. Remember HARP and HAMP? Those programs all fixed the interest rates for workout loans for 5 years. Many of those loans were refinanced from 2009-2012. When they uncap the borrowers' payments rise and they are uncapping now. A significant number of those borrowers are behind in their payments again. Who would've thought that might happen? Those defaulted loans will result in foreclosures and those have already been entering the market.

John Arendsen · Answer

@Kevin Fox

Message received loud and clear. I should be ashamed of myself, however. As a contractor and a RE Broker, investor and developer I should have been more in the game and taking notice of all the foreclosure yet remaining. But I moved on a few years ago thinking that there were no more real F&F and B&H opps. Now I know. Thanks for your FU.

Kevin Fox · Answer

John,

Something else to definitely keep in mind is that the numbers I provided are taking in to account the % of SALES not listings.  So, there is a chance you are correct in your analysis. I just thought I would share the information that I knew was available to me.

John Arendsen · Answer

@Kevin Fox Not trying to be argumentative but this is what it looks like on Zillow Foreclosure data which is where I picked up the 5 I'm considering now; two of which I've already put offers in on and one which is a pocket listing that another agent is actually renting.

I know what the stats say and have no reason to doubt them. I guess I was just taken aback as to how many properties still remain. I haven't even done an MLS search yet but I'm planning to do that this week just to compare between they and Zillow as we all know how unreliable Z can be.

http://www.zillow.com/homes/for_sale/San-Diego-CA/fore_lt/pmf,pf_pt/54296_rid/33.168594,-116.416626,32.46806,-117.785798_rect/9_zm/

Kevin Fox · Answer

Hey @John Arendsen

Taking a look at the sales statistics from CAR,  distressed property sales are actually going down, as equity sales accounted for 94% of sales in September and October (Down 3% from 2014)

Here is the full write up, if you're interested:

http://www.scribd.com/doc/291048108/Distress-Sales-PPT-Oct-2015

Mel Jeffrey · Answer

@John Arendsen I agree I think with the right deal and plan anything is possible.  I will keep you posted on my San Diego transactions.

John Arendsen · Answer

@Mel WyattMF is very hot right now primarily because housing costs are so high and folks have no choice but to rent. I personally know many folks who make very good money but just don't have the down payment to purchase a home. So they pay a huge premium to rent. That stated, however, the purchase price for MF is also extremely competitive and often discouraging.

Mel Jeffrey · Answer

@John ArendsenI definitely need to look into San Diego it is my home away from home and I would love to buy a multifamily.

John Arendsen · Answer

@Elizabeth ColegroveActually I think it has to do more with the qualified buyers pools which seem to be shrinking in North County Coastal San Diego most recently. I've heard that some biotech and high tech companies are relocating due to employee housing issues.

Could be a motivating factor. I'm in Austin visiting my daughter and her family for the Thanksgiving Holiday and I'm amazed at what's happening here what with companies like Apple and Google moving into the area.

In fact my son-in-law moved here from OC, Cali because his Executive Search firm all but demanded it due to his high tech CEO, CFO, CEE job requests in the Austin area.