Also on the better homes we are starting to see multiple offer situations in more than just the low end. This market could get really tight if the sales rate remains at the same level and the inventories continue to fall. If this trend continues you will start to see upward pressure on pricing in 3 to 4 months. Now if you look at the monthly price per sq. ft. graphs they are pretty steady and don’t show much upward movement but that may change. At my open houses I am continually seeing new buyers come into the market that feel more confident about their personal situation and very dissappointed regarding the lack of homes to select from. Especially nicer newer homes.

The spreadsheet link is here: Weekly scorecard 3-1-10

The story this week is that the lenders seem to be real slow getting the inventory to the market. In EB where there are 53 bank owned homes there are only six homes listed. On the January 9th report there was the same 53 foreclosed homes but 13 bank owned homes were listed in the MLS.

Overall if you look at the spreadsheet the bank owned inventory has stayed steady. The homes that are NTS are climbing for the because the lenders had a back log of homes to put into foreclosure until they figured out how to deal with the Washington State’s new requirement that requires the lender to attempt to contact the borrower and see if there is an alternative to foreclosure.

Looks like there will be a number of bank owned homes coming to the market in the summer unless they get short sold in the meantime. The spreadsheet link is here: Bellevue Foreclosure Report 2-6-10

A disturbing trend is starting to emerge. The middle calss neighborhoods such as are in EB are really starting to take the brunt of foreclosures. The 98008 zip code in particular. The higher you go in price the less the problem and in fact in WB the problem appears to be easing. While I maintained the real estate recovery was going to be a top down recovery in this area, this is not good news overall. Something needs to be done to put people back to work. Our GDP increased 5.7% this week over the last quarter but compared to last year for the same quarter it was little increased but the most distressing part is that same GDP was created with about 3,000,000 fewer jobs. Shrinking our way to propserity will not work and eventually will cause the economy to begin contracting again. This is the message the stock market has finally figured out.

Here is the spreadsheet: Bellevue Foreclosure Report 1-30-10

There still seems to be a real lag time between when the lender gets the home back and gets it in the MLS. The servicers handling these homes for the banks appear to be overwhelmed. The problem is that a foreclsoure is a cost and the banks are hesitant to spend any funds to expand these operations.

The link for the spreadhshhet is here: Bellevue Foreclosure Report 1-23-10

Here is the link for the spreadsheet: Bellevue Foreclosure Report 1-2-10

However the next four weeks will be critical. The numbers for foreclosed homes lag by two to three weeks for foreclosed homes since the service I use only shows the foreclosures after the Trustee Deed’s records. That can take two to three weeks from the time the Trustee sale actually occurs. The reason this is important is that the Trustee sales occur on Friday. This last Friday and this coming Friday there were no Trustee sales due to the Christmas and New Years holidays occurring on Fridays. The result will be that you will probably see the number of foreclosed homes going down in the first part of January and then a spike in the first part of February. However in the immediate term it looks like the amount of distressed inventory is in a “trading range”. Sales remain robust and it needs to be seen next year if the rate of sales can keep pace with the rate of foreclosures.

 Click here for the spreadsheet: Bellevue Foreclosure Report 12-26-09

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

As we discussed earlier there is a buying opportunity in the near term with rising bank inventories overall, even if they aren’t listed. Banks need to sell even if it doesn’t seem like it when you make your offer. Again the Altos numbers confirm this near term trend as you can see values peaked in October and have been in a decline since. Given a near term slow down in sales volume and bank inventories this could keep values at a lower level for the next couple of months, however overall the decreased inventories will put a floor on prices so seeing a situation that happened last year with small sales volume and ballooning inventory and as a result plummeting values doesn’t look like it is in the cards. However there is nothing to drive prices up. The theories of Option Arm time bombs and readjustments causing another large down leg will help to keep values low but if the inventories remain low these homes will be absorbed by the market in the next two years.

What is interesting in this cycle is how quick employers were to cut jobs and how the lenders were totally unprepared to handle the wave of foreclosures. Employers can’t keep cutting jobs forever, especially if the global market keeps growing. However there is nothing driving up wages and salaries and there are large disincentives for employers to hire given the legislation proposed in congress. Looks like we are going to get drug along a sharp rocky bottom.

Here is the link to the spreadsheet. Bellevue Foreclosure Report 12-5-09

Clink on the link for the spreadsheet. Bellevue Foreclosure Report 11-28-09

West Bellevue was another story. They had the same weird trend going on. Their overall distressed inventory increased by one home from 66 to 67 but the NTS/Foreclosed ratio fell to an all time low of .76. However there were two new foreclosures that popped up out of nowhere so let’s also give this one another couple of weeks for these anomalies to work through.

South Bellevue made a little more sense. The number of homes remained steady at 44 but the NTS/Foreclosure ratio fell under 1.0 to .91. This is the only market that is sending a very timid signal that things may be peaking but again the next two to three weeks will be critical.

The one thing I am noticing is that the banks are starting to bring foreclosed inventory to the market a little quicker. Click on the link for the spreadsheet.

Bellevue Foreclosure Report 11-14-09