Sales of Foreclosed Homes Creeping Up

Numbers are up by 3 percent compared to last month, but numbers are down compared to this time last year.

More Riverside County homes -- including those in Temecula -- ended up on the auction block last month, but the figure was far below the level of activity recorded a year ago, a real estate tracking firm reported today.

Bay Area-based ForeclosureRadar.com's monthly "Foreclosure Report" showed a total 844 repossessed properties were sold countywide in May, compared to 818 in April -- a 3 percent increase.

The county's foreclosure sales were down 48 percent from a year ago, when 1,649 homes were auctioned off.

Statewide, sales of distressed properties crept up 6 percent in May, but compared to a year ago, were down 47 percent.

ForeclosureRadar.com founder Sean O'Toole said efforts to protect defaulting homeowners in California through legislation will only prolong the problem.

"The only thing stopping foreclosures will accomplish is insuring that we are stuck with the negative equity problem for far longer then necessary," O'Toole said.

"I completely get why folks are mad at both the banks and the situation," he said. "However, stopping foreclosures will lead to a much longer economic recovery, increased blight, fewer jobs, lower property tax receipts and fewer opportunities for new homebuyers and investors."

Monica La Combe June 13, 2012 at 03:35 AM
Of course they are, the banks are forclosing on homes and the investors are snatching them up and renting them out (with plans of holding on to them untl the market is doing better). This is bad for the community because now ANYBODY can live here if they can afford to rent a home. The source of your article (post on fb) is questionable.
LBV Collins June 13, 2012 at 04:15 AM
Hi Monica. I’m not sure why you say it’s bad for the community that investors buy homes and rent them out. You make it sound as if an investor is going to pay $1 million for a mansion and then rent it out to a bunch of frat boys for $400 per month. What idiot would do that? As an investor, I’m going to buy a distressed property, renovate it so it’s habitable, and then rent it out to responsible, employed people… at the going market rate. Here’s some insight: Fixed rate mortgages are at all-time lows. (Seriously… they’ve NEVER been this low.) I can buy an REO (bank-owned) property typically at below market rates. For a small investment, I can fix it up so that’s it’s in tip-top shape, thereby increasing it’s value, as well as the value of homes in the neighborhood. Then I can rent it out to highly qualified people (with GREAT credit scores) for the going rental rate. My typical annual rate of return? About six to eight percent… not counting appreciation. (Oh, by the way, the housing market bottomed last year and is… SLOWLY… rising.) Here’s a suggestion. Buy a home… NOW!
KB June 13, 2012 at 05:33 AM
Bottom Line: In general owner occupied and renter occupied communities have different characteristics. And those characteristics may account for an 'element' that seems to have moved into Temecula. LBV: Stop with your phony pump and dump speech; and you only think your an 'investor' - we'll see how that turns out.
KB June 13, 2012 at 05:35 AM
BTW, as for those historic low rates - what's going to happen when rates go up (and they will) ? LBV, you're clearly a novice.
Uncle Roy June 13, 2012 at 01:03 PM
Saw this happen in Menifee LBV, investment group picked up a foreclosure and rented it out to felons in a nice neighborhood, if you don't think it's happening,you're brainless
LBV Collins June 13, 2012 at 02:07 PM
Hi KB. Do you have data to back up your "owner occupied and renter occupied communities have different characteristics" comment that proves cause-and-effect, or just anecdotal observations? I'm not saying that neighborhoods don't become run down. (That's just part of the natural aging cycle of neighborhoods.) But I am saying that when investors buy homes and rent them out, it doesn't necessarily equate to neighborhood degradation. To the contrary, investors can improve the quality of a neighborhood by buying empty, uncared for homes with dead lawns, rehabbing them, and then renting them to responsible adults. Do you have any idea how many homes in any neighborhood are rented out? I doubt it. Or do you just get a sense when you drive through an area that it's "characteristics may account for an 'element' that seems to have moved into Temecula?" Regarding your "Stop with your phony pump and dump speech; and you only think your an 'investor' - we'll see how that turns out." What the heck does "pump and dump" mean? And so far, my investments have turned out pretty well. Here’s some more insight into REOs and short sales: LOTS of these homes were built just a few short years ago. They’re selling for a fraction of what their owners paid. They’re quality homes in desirable neighborhoods. Current housing market conditions have presented us with a very rare opportunity to buy great homes in great neighborhoods at historically low rates. That’s not hyperbole; that’s fact.
LBV Collins June 13, 2012 at 02:32 PM
I dunno, KB… what IS going to happen when rates go up? And I agree: rates WILL go up. They go up when the economy starts growing too fast because there’s consumer demand. Rates go up because the Fed wants to slow down the robust economy to keep inflation in check. And what happens when you have a robust, growing economy? You have lots of employed people who are responsible and need a place to live and raise their families. Then what happens? Home values go up and rents go up... and the home investment grows in value. As I suggested to Monica: Buy a home… NOW! (That's my novice advice.)
LBV Collins June 13, 2012 at 02:40 PM
Hi Uncle Roy. I’m not saying that doesn’t happen. (I’ve seen it happen, too.) It just strikes me as REALLY stupid for someone to invest in a home only to rent it out to riff-raff who move in and destroy it, driving down the home’s value as well as the value of the neighborhood. Vetting potential tenants is key to ensuring your investment grows in value.
KB June 13, 2012 at 03:49 PM
LBV: Sorry, you really don't know what your talking about. Your discussion on rates is simplistic and false and shows you have not a clue what your talking about. Sounds like you attended some realtor classes and you're regurgitating the BS they told you. To understand anything about rates you have to understand the bond market, which you obviously don't.
LBV Collins June 13, 2012 at 04:10 PM
Okay, KB… fair enough. I’ve got it all wrong. The Fed doesn’t adjust rates to try and influence economic growth. (Though Ben Bernanke seems to think otherwise.) And I don’t understand the bond markets? Okay, I don’t. (Unless you’re referring to the inverse relationship between bond prices and bond rates… where the current flight to the safety into US bonds has pushed bond prices up and caused bond rates to drop.) Other than that simplistic overview, I guess I don’t have a clue what you’re talking about. BTW: I’ve never attended one of those real estate investment seminars. But if you say I’m regurgitating their teachings, then I guess you have attended them. So I’ll just take your word for it. Also, I enjoy learning from others, listening as they share their perspectives and insight. So far, you’ve simply been attacking me instead of enlightening me. So, please, share your insight so that I can become a better investor. (I’m serious. Please share your insight.)
Winchester Collection June 13, 2012 at 11:00 PM
The element migrated here back in the 90's when Temecula rezone the whole community to pay for the districts taxes. Prices have always been in flux here. Is this not the reason some of you guys came here? Price doesn't equal Bad element. Complacency and "I can't beleive I'm living next to that !@#$%"is what ruins a community. Rental properties are dictated by demand in community.
Winchester Collection June 13, 2012 at 11:09 PM
I'm soon to convert my home to a section 8 house to rent out. This will give a hard working family opportunity to raise their kids in a great community and add value to our country as their kids grow and work to make us a strong country. I am currently a ex kid that grew up poor in a great community in LA and am thankful for my neighborhood for making me who I am today. Served in Military Honorably, Have a 4 year degree and pay extensive taxes to develop our future youth, take care of our elderly and keep up parks, roads and schools.. I also coach kids in sports to give them a chance, regardless of parents income!!!!!!
Winchester Collection June 13, 2012 at 11:10 PM
YES BUY NOW!!!!!!!!!!!!!!!
LBV Collins June 13, 2012 at 11:57 PM
Couldn’t agree more, Winchester! And for those who want me to back up my earlier points that the housing market has bottomed and that mortgage rates are at historic lows, check out these links… 92562 Home Prices and Home Values: http://www.zillow.com/local-info/CA-92562-home-value/r_96917/ Record-Setting Low Fixed Mortgage Rates Persist: http://freddiemac.mediaroom.com/index.php?s=12329&item=129284
KB June 14, 2012 at 03:52 AM
Honestly LBV with the internet I wouldn't think so many clueless zombies would still be wandering around. I can't teach you econ here, but as a primer you should go to youtube and type in Peter Schiff and start watching. Were in a different world now; no really we are. Time to wake up. Tell me, please tell me - where in the world is appreciable growth in the economy going to come from? Since the 2008 crisis the very anemic growth was due primarily to phony stimulus money; the rules from post WWII up until about 2000 simply don't apply anymore. Unemployment is officially still climbing, and the real numbers are probably much worse. Pull your head out of the sand, educate yourself...it's time to wake up. It's not about doom and gloom, it's about math and the math is very bad. A new reality is setting in.....whether you want to believe it or not.
LBV Collins June 14, 2012 at 03:46 PM
Good morning, KB. Not sure why you feel compelled to resort to name calling. To me, that often means a raw nerve was struck. Given your negative reaction to my suggestion that now’s a good time to buy real estate, I can’t help but wonder if you or someone you know got burned by paying for the advice of some fix-n-flip real estate guru who promised huge, easy, never-ending fortunes in residential housing… fortunes that never materialized. Nonetheless, I appreciate you suggesting I check out Peter Schiff. I’ve heard of him, by the way. I’ve seen him on a talk shows, too. He’s a gold bug who anticipates gold climbing to $5,000/oz. once the bond market collapses within the next year or two. He’s also a student of the Austrian School of Economics. (When I read that, my first thought was, “Oh… I bet he loves Ron Paul.” Then I read he was Paul’s economic adviser during Paul’s 2008 presidential campaign. I didn’t know that… and it makes sense.) Truthfully, discussions of Keynesian vs. Austrian economic philosophies is outside of my area interest. Even if Krugman and Schiff argued the two philosophies all day long, I doubt a layperson would walk away saying, “Oh… that guy’s obviously right and the other guy is wrong.”
LBV Collins June 14, 2012 at 03:46 PM
You may find it interesting that in a recent radio interview, Schiff said that buying a home at today’s low interest rates was good, though not the best way to protect yourself against inflation. (Fast-forward to around the 12:30 mark.) http://realestateguysradio.com/tag/peter-schiff/ A fellow I admire recently said that residential real estate is, “…a very attractive asset class now.” He continued, “If I could buy a couple of [homes] at distressed prices and find renters… and take a 30 year mortgage, it’s a leveraged way of owning a very cheap asset… and I think it’s about as an attractive investment as you can make.” http://youtu.be/58-GHsG_ydw So, if you favor precious metals like gold and silver, I certainly can’t fault you on that. But I still stand by my suggestion: Buy a home… NOW!
zdutch1 June 14, 2012 at 06:00 PM
I cant believe I just read your guys back and forth but I appreciate LBV for elaborating and knowledgeable retorts. And thank you for not lowering yourself, you are right, something probably happened there.
KB June 14, 2012 at 06:20 PM
LBV: I wouldn't consider Peter Schiff a gold bug, he's a free market capitalist and understands the consequences of excessive gov' intervention. Attacks like 'something must have happened' to me won't work. Nothing happened except I educated myself on what is nothing more than a big ponzi scheme that all of the money in the universe won't fix. In the very long run, you may be right about real estate - but in the very long run were all dead. Right now you're nothing more than another pumper/dumper catching a falling knife (and a sharp one at that) who has little grasp on current economic realities. Yes, the fed and the central bank can keep this all going for longer than most would expect, but at the end of the day even the fed can't stop the reset that will and needs to occur.
LBV Collins June 14, 2012 at 09:06 PM
Hi KB. First of all, if you thought I was attacking you, then I apologize. I wasn’t. I was just wondering aloud as to why you keep accusing me of being a “pumper/dumper.” BTW: I had to look up that term. It refers to someone who holds a position in a stock, then generates demand by telling everyone how wonderful the stock is (thus artificially “pumping” up the price), and then “dumps” the stock at the inflated value for a profit. If I’m a real estate “pumper/dumper,” then so is Warren buffet and Peter Schiff, given that they both stated that now is a good time to buy residential property. Regarding your comment, “I wouldn't consider Peter Schiff a gold bug, he's a free market capitalist and understands the consequences of excessive gov' intervention,” I think that’s a fair statement… especially since he’s an Austrian School of economics enthusiast. Sounds like you are, too. (Not a criticism, BTW. Just an observation.)
LBV Collins June 14, 2012 at 09:07 PM
I don’t think I’m catching a falling knife by entering the real estate market at this point in time. (And neither do Schiff or Buffett.) If you look at this link, “92562 Home Prices and Home Values:” http://www.zillow.com/local-info/CA-92562-home-value/r_96917/ , it appears to me that the knife already landed back in 2009. (At least here in Murrieta.) And if you look at the top chart on this next link, it appears that housing prices have fallen to where they should have been had the last housing bubble not occurred: http://www.jparsons.net/housingbubble/ I could be wrong, but I’m willing to bet that the knife has already firmly landed. Is the government and the Fed playing a fast, furious and dangerous economic game? Again, it depends on whether you’re a Keynesian or Austrian enthusiast. So who’s right and who’s wrong? Truthfully, I don’t know. Nonetheless, Schiff, Buffett and I think it’s a great time to buy residential real estate. (Though Schiff prefers foreign real estate markets to US, and prefers gold over either of those.)


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