The spreadsheet is here: Bellevue Foreclosure Report 3-26-11

The spreadsheet is here: Bellevue Foreclosure Report 3-19-11

As I discussed previously 2010 was to be the year of the “hanger’s on”. These are people who thought the market might pick up and bail them out or that potentially there job or business prospects would improve as has happened in more robust recoveries. These prople drained their resoruces and threw in the towel in 2010 and I think we are pretty much through that cycle. This trend produced a lot of higher end homes in good condition to select from. At the street level I am seeing this inventory depleted substantially and I think this cycle has run its course.

2011 will be the year we see the all of those failed loan modifications not working out and those homes will be headed to foreclosure. Also later in the year the next source of foreclosures will be the lower end homes where “tax credit” buyers got in over their head. This will be the story the press will pick up on is home purchased in 2009 with the artificial stimulus will come back to bite us without a substantially improved domestic economy. However most of this activity will be at the lower end. The bottom line is for Bellevue is that overall you will see much less distressed invtory over $1,000,000 and the bulk of it will be $500,000 and under. If you are looking for a cheap condo in Bellevue in a converted building you will have a lot of inventory to select from.

The spreadsheet is here: Bellevue Foreclosure Report 1-1-11

As we have discussed last week the quality of the inventory seems to be degrading with most of the inventory coming on being lowered priced homes needing repair or even worse old condo conversion units. However this week there is an exception. There is a home located at 2730 1o5th Ave SE in Beaux Arts. This home is a little over 5000 sq. ft. and is located in a prime area of West Bellevue. Beaux Arts is a private community which has retained a very natural character and is located close to downtown Bellevue and I-90 access. In addition this community has 1100 ft. of community beach on Lake Washington. This home was a builder’s own personal residence and was exquisitely done.  This is one of tail ends of the nicer new comes coming to the market. This home was foreclosed on about six weeks agao and will be listed in the next couple of weeks. It was at $1,680,000 as a short sale. If you figure about $300 per sq. ft. that would put the value at about $1,500,000. Anyone interested in this home should get a hold of me and we can discuss the best way to approach an offer. The bank selling the home is Wells Fargo and they have a policy of not accepting offers from the public for almost two weeks. In the early stages of the listing they only accept offers from municipalities and non-profits. So if you make an offer initially they just sit on it and wait for other offers so your best timing is right after they begin accepting offers from the general public.  The only good news about Wells Fargo is they tend to list high and their inventory will age and at some time they will capitulate. After 30 days then is the best time to make the offer. If this one gets listed over $1,500,00o I think that is what might happen here.

Here is the spreadsheet: Bellevue Foreclosure Report 11-13-10

The only area with any increase at all, and this was very mild, was West Bellevue. some areas such as East Bellevue are down almost 60% from their peak of total distressed inventory. Also if you look at the MLS inventory short sales are not balloning which would be the logical conclusion if the lenders stopped foreclosing. The short sale process does not require a foreclosure and the lender does not have to prove they have the rights to the note and deed of trust as in a foreclosure, all they have to do is release their interest.  If you are looking for distressed inventory there is less to select from and the window of opportunity may be closing if more buyers start entering the market next spring.  I know there is a theory that another foreclosure wave is coming with the major ARM resets happening in 2011 and 2012 but I am not seeing it here locally. In addition I am seeing banks respond and process short sales in a much more timely manner. Let’s see what the trends are in the next couple of weeks.

The spreadsheet is here: Bellevue Foreclosure Report 10-23-10

The listed inventory remains short sale and bank inventory remains very stagnant with not much movement. Also the quality of the inventory seems to be declining with most of the newer homes gone, except a couple in East Bellevue. There is more homes suffering maintenance and upkeep issues. A lot of older homes in poor repair. The buyers in this market severly discount these homes because they may not want to do the work and they have to use out of pocket money mainly to get it done and not many buyers have the money after the purchase. That is why you see reasonably priced homes in good condition which have had the kitchen and baths update go very quickly while others just sit. Eventually the prices on these homes will keep coming down until there is some incentice to fix the home up. Thee are not many flippers anymore and they need to get the homes really cheap in order to justify a flip. However the flippers are the ones who mainly update the inventory. Recently FNMA has found the discounts to be so severe thay are actually contracting with local contractors to repair the homes so they are marketable. This the first wise use of tax payer money I have seen.

The spreadsheet is here: Bellevue Foreclosure Report 8-7-10

The spreadsheet is here: Bellevue Foreclosure Report 7-10-10

In talking with the one of the owners of the local Trustee Services; these are the guys who post the sale and take the property through foreclosure as the “Trustee” for the owner; said that there will be a rising swell of foreclosures the first of the year. This will be caused by the banks figuring out how to deal with two big changes in the law. The first is that in Washington State 30 days has been added to the foreclosure process since lenders are now required to try to make contact with the borrowers in order to see if there is an alternative to foreclosure. The shortest time period that can occur for foreclosure from when the payments were last being made is 220 days. The other law that changes things is a federal law that states if there is a tenant in the home now the tenant will have 90 days to vacate. This one is very interesting and is causing some strange dynamics. Some of the owners aware of these laws are now renting out bedrooms in their homes or vacating the property and renting it. They don’t make the payment and they keep the rent. Technically once the foreclosure occurs and the bank takes title to the property, the bank is entitled to the rent but good luck getting the money. Theoretically an owner could stop making payments and get almost a year’s rent while the property goes through foreclosure and the bank takes possession. If you have a very shrewd owner they could try to renegotiate the loan or short sale the property and pull out at the last minute and drag the process out to 18 to 24 months and keep collecting rent. If more owners wise up to this it could throw a big wrench in the works before the lender can get possession of the property and be able to sell it.

The one that is pretty certain is that most of the new construction available has been foreclosed on and that inventory will decline. I am now seeing banked owned newer homes in good locations like West Bellevue, Mercer Island, Kirkland and The Reserve at Newcastle that are well priced now have multiple offers and these are homes well over a $1,000,000. One just went on Evergreen Point Road in 5 days that was listed for a $1,399,000. I suspect it went over full price. Also in November a lot of the Lux and Bayridge inventory in Kirkland that had been foreclosed on and sitting got cleaned out. In the Reserve at Newcastle there are no new listed homes at this time. This time last year there were over thirty listed homes now it is about five. Looks like more homes coming but from what I am seeing they will be older resales so you had better get to know the folks at Home Depot.

The link for the spreadsheet is here:Bellevue Foreclosure Report 12-19-09

It looks like a buying window is starting to form. Increasing amounts of listed foreclosed inventory is coming to the market when sales volume slow seasonally and also in this market cycle after a good run of volume that appeared to use some of the pent up demand from buyers who were looking for lower prices. Now in addition to the seasonal slow down there needs to be a cooling off period while new demand builds again. If the NTS/foreclosed ratios keep declining then it means that in the spring there will be less overall distressed inventory which will support pricing in the market but in the near term in our slowest period there will be a number of bank owned homes coming to the market. In the next month there will be some more downward pressure on priceas as these bank sellers will have pressure to off load these homes and more will keep coming on. When the lenders list these homes they want them sold. Most only give 60 day listings and to some extent they are their own worst enemy on their inability to manage the sale of these homes through call centers. They think abusing buyers is a good marketing technique. Once you see the listed inventory spike that will be the time to make a move. If the bank owned inventory spikes and the NTS inventory keeps dwindling then that will clear the deck for the spring market. At that time some of our local sellers can enter the market and maybe have some price support. However for right now keep an eye on the listed bank owned inventory and let the out of town servicers give our local buyers an opportunity at a good deal.

Here is the link to the spreadsheet: Bellevue Foreclosure Report 10-31-09

In the weeks previous the robust market conditions were taking the NTS inventory off of the shelf quicker than it was coming to the market while the number of new foreclosures was actually increasing. However it appears the slowing sales is not taking the inventory off of the shelf as quickly. Even the listed distressed MLS inventory has taken a jump. Looks like the inventory will build until the prices come back down to the $220 per sq. ft. level and sales volumes will probably increase then to absorb the inventory. This market appears extremely price sensitive with the buyer only willing to play at a certain level.

Click on the link for the spreadsheet.
East Bellevue Foreclosure Report 10-17-09