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Noticing more foreclosures hitting the market?

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Have you started to notice a few more foreclosures lately? Let’s talk about that and interpret what is happening. Take a look at the graphs below and then let’s consider a few points.

foreclosures and short sales in sacramento county by sacramento appraisal blogforeclosure in sacramento county by sacramento appraisal blog

A Few Thoughts on the Foreclosure Market:

  1. Sifting Numbers Carefully: The percentage of foreclosures has technically increased lately. However, the most important thing to look at is the number of foreclosures. Since sales volume has been very sparse these past few months in Sacramento County, and foreclosure sales have been more consistent during that time, this naturally gives foreclosure figures a boost for the overall percentage of the market. For instance, we saw a 1% increase in foreclosures from Q3 to Q4 2013, yet we saw the same amount of foreclosures during each respective quarter. Or the numbers for January & February technically show another increase, yet the number of foreclosure sales thus far are actually consistent with the two previous quarters. This goes to show we can make numbers say whatever we want if we’re not careful.
  2. A Key Factor: However, there are definitely more foreclosure listings, which is exactly what we’ve all been seeing on MLS. For context, the past two quarters in Sacramento County each had about 210 foreclosure sales, and there were 139 bank-owned sales in January & February combined. But there are a total of 157 foreclosure listings and 157 foreclosure pendings on the market right now. If these properties end up closing escrow and others continue to hit the market at the same pace, we could see a difference in sales volume in coming time.
  3. No Tidal Wave: We’re not talking about a tidal wave or avalanche increase here, so call off the troops and don’t sound the alarms. But do be aware of some movement stirring in the foreclosure scene.

Paying attention to the trends helps us better serve our existing clients and it can help us see who our future clients are going to be. I hope this was helpful.

Questions: What are you seeing out there in the market? What are you hearing from clients? If you are a real estate agent, are you doing more REO BPOs or taking on more REO listings?

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The foreclosure limbo game in Sacramento

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I’m reminded of limbo when thinking about distressed sales in Sacramento County. Both short sales and foreclosures used to absolutely dominate the market several years ago, but nowadays they just keep going lower and lower and lower (like limbo). Let’s digest some market trends together below.

Short sales and foreclosures in Sacramento County - by Sacramento Appraisal Blog

Bank-owned sales used to represent over 70% of the market five years ago, but now they are only 4.7% of all sales in Sacramento. That is an amazing shift, don’t you think? Short sales have also seen a rapid decline as they have decreased by nearly 19% over the past 12 months so they now only make up 15.3% of all sales.

Short sales and foreclosures in Sacramento County - by Sacramento Real Estate Appraiser

It still sounds alarming to think that 1 in 5 sales in Sacramento County is either a foreclosure or short sale, but this is a significant improvement from five years ago when 84% of all sales were distressed (in the entire county). This is a good reminder that change takes time.

Share the Trends: Feel free to share the graph and chart above in your newsletter or on your blog, Facebook or any other social place. The only thing I ask is you keep the images intact and link back to my blog. See my sharing policy for more information. Enjoy.

Question: I’ve been seeing quite a few short sales sell VERY low. What are you seeing out there?

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What happens to foreclosure when prices go up?

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When prices increase, what happens to the rate of foreclosure (REOs)? Let’s take a look at price range segments under $500,000 in Sacramento County to see what we might discover. What stands out to you from the chart below? Generally speaking, the higher the sales price, the lower the percentage of foreclosure. There seems to be greater success with short sales at higher prices too, though the stats look pretty decent above $100,000. Does it shock you to see 83% of all sales under $100,000 as either bank-owned or short sales? Lastly, the total percentage of distressed properties consistently declines as price increases. What does that tell us?

Let’s look at all counties in MLS also to see if we might see a similar trend. It’s always nice to compare one set of data with a larger set as a safeguard. Counties in Sacramento MLS consist of Sacramento, Placer, Yolo, El Dorado, San Joaquin, Stainslaus and portions of Merced, Yuba/Sutter and a few other places.

What stands out to you? If you are a real estate agent, what are you seeing out there in the market? I’d love to hear your thoughts. Feel free to comment below.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.