Foreclosures and motivated sellers

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A couple of follow-ups to yesterday’s Dataquick report on California foreclosures:

--Motivated sellers. We’ve heard often that this downturn won’t be as severe as the mid-’90s real estate bust because the California economy is fine, and thus there are few ‘motivated sellers’ as desperate as the newly jobless aerospace workers who, according to economic legend, helped drive prices lower in the early and mid-’90s. Commenter Cal sets this one straight: The banks and lenders that find themselves owning foreclosed houses are as motivated as any seller as you will find, and there are more of these motivated sellers every day, and they are becoming a bigger and bigger part of the market:

(This from Cal):
--2006 Third Quarter, Notice of Trustee sale (NTS) as a percentage of sales reported by DQ for L.A. County in 3Q06: 1.93%

--2007 Third Quarter, Notice of Trustee sale (NTS) as a percentage of sales reported by DQ for L.A. County in 3Q07: 20.35%

--So 1 in 5 sales last quarter essentially have been replaced by more motivated sellers.

Trouble on the Westside? Writing in today’s Los Angeles Times, Peter Hong quotes a Beverly Hills agent who predicts the foreclosure wave will eventually make its way west of the 405: ‘It’s working its way to the Westside. The Westside is always last to get hit.’ More: ‘In four Newport Beach-area ZIP codes, for example, there were 11 foreclosures in the third quarter, up from just three in the same period last year. There were seven foreclosures in Bel-Air, and none a year ago.’

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Photo Credit: AP