Posted by & filed under Brookside Real Estate, Morada Real Estate, Quail Lakes Real Estate, Real Estate Market Trends, Short Sales, Spanos West Real Estate, Stockton Real Estate.

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May 2010 Stockton Area Market Update

Short Sale? Foreclosure? Strategic Default?

(Short Sales Continued…)

Last month we briefly discussed Short Sales and Foreclosures. We reported that underwater borrowers are often in a quandary about what to do, and that over 70% of borrowers whose homes are foreclosed upon have never contacted their lender(s).

We also reported that lenders typically prefer short sales. Foreclosure sales not only typically cost more, but also result in lower sales prices. Net proceeds in a foreclosure are only 70%, on average, of that realized in a short sale. In addition as one reader pointed out, a home in the foreclosure process is more likely to be vandalized than a home in the short sale process. Unlike a foreclosed upon home a home in the short sale process is likely to be occupied and cared for – often by its owner-occupants.

The government’s HAFA guidelines are new in practice. Borrowers (sellers) who are considering a short sale should become well educated on HAMP, HAFA, the short sale process and what each of these mean to their specific circumstance. We can answer many of your questions in these areas, or point you in the right direction to pursue legal and / or financial advice if necessary.

Last month we did not discuss “Strategic Defaults”. Strategic defaults have been defined as defaults on home loans that take place even though a homeowner is capable of paying. They stop paying on their loan simply because they owe more than their home is worth.

A short sale may be a better alternative.

Your Home Team lists and closes more short sales than any other Central Valley agent or team. Our short sale processing is cost free to the seller and we are ready to help. Call us at (209) 471-6516 with any questions you may have. We also blog frequently about the short sale process and real estate trends.

The key to working out the problem is to act quickly.

AND…

Now that the California State Senate has passed SB 1178 Distressed Homeowners who have refinanced are one step closer to protection from debt recourse. The bill is currently before the State Assembly awaiting a vote determination. If it passes it would mean thousands more homeowners would become eligible to short sell their homes with their debt forgiven!

Call us!

The following are market highlights for some of our Stockton neighborhoods. Click on the name of the neighborhood to view detailed reports and graphs for that neighborhood.

Inventory Units

Average Sales Price

Days On Market

12 months’ sales

Avg Sales per Month

Months in Inventory

All of Stockton 2,292 $ 145,000

48

5,523

460

5

Brookside 75 $ 287,000

64

130

11

7

Lincoln Village East 55 $ 141,000

36

132

11

5

Lincoln Village West 59 $ 143,000

47

105

9

7

Morada East 36 $ 788,000

585

26

2

18

Morada West 209 $ 202,000

53

553

46

5

Quail Lakes 38 $ 128,000

70

74

6

6

Spanos East 187 $ 220,000

58

317

26

7

Spanos West 57 $ 219,000

47

120

10

6

Click here to search the MLS like a realtor or the following links to view the homes available in the following neighborhoods!

(Links are available at the bottom of this email to detailed market reports for Brookside, Lincoln Village, Lincoln Village West, Morada, Morada West, Quail Lakes, Spanos East and Spanos West.)

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Stockton Market Trend:

Continued delinquencies, foreclosures, and the new trend of Strategic Defaults should result in a housing inventory increase – and continued home price reductions. Traditional laws of supply and demand dictate this will happen, unless there is massive finance industry (bank and governmental) interference.

Stockton Stats for May 2010

o There were 2,292 homes for sale in Stockton at the end of the month. This total includes 799 pending units, leaving a balance of 1,493 units (3 months’ inventory) available for sale.

o 5,523 homes were sold in Stockton during the 12 month period, an average of 460 homes per month. This compares to 6,879 homes, or a 573 unit average per month one year ago, a 20% drop.

o SALES ARE SLOWING…

o There is a 5 month inventory on the market (see the “Months Sales In Inventory” chart above). Exclusive of pending sales (more transactions fall out of escrow in this market than in a normal market) there is a 3 month adjusted inventory.

o There should be a rash of new homes that will be placed on the market over the next few months unless lenders “bank” foreclosed-upon homes, or some other solution is found for ‘warehoused’ foreclosures and other “Shadow Inventory”.

o 460 units were sold this month.

o The average sales price per square foot is $85 – less than the cost to build a home.

o The average home sales price was $145,000.

o Increasing delinquencies will result in new measures and should continue a downward pressure on Stockton home prices.

Click on any of the following links to view neighborhood specific market reports.

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