4/02/2008

Distressed Listings in Long Beach, Cerritos and Huntington Beach

Some buyers are thinking that foreclosure and/or short sale properties (they owe more than they will net from the sale) are in every neighborhood where the buyer would most like to live. Not true, and it's been the source of misunderstanding, and sometimes frustration, for people who might otherwise make a move right now. A short sale is not necessarily the way to go: There are "normal" listings of non-distressed properties priced just as advantageously; plus, a short sale is in the hands of the bank, not the seller, and the bank. Fathom7's 3/31/08 entry on the Redfin site says, "Add to this the matter of the short sale taking a long (sometimes interminable time to complete) and these properties become amazingly undesirable. What I don't understand is that rather than take a rational offer for the home, the bank and the still-present-owners appear to prefer foreclosure over accepting a short offer on the short sale. somebody is getting something but nothing gets accomplished for the buyer," (It's true, some banks are not clearly understanding that foreclosure is usually a more expensive process than accepting a buyer's offer and taking a loss), and,
"Here's one example of what I have been dealing with: I have had interest in a particular house – the asking was outside of what I wanted to spend for that house (too many compromises for the premium price). Then , the price took a drop. No sooner had I discovered this when I learned that it too is a short sale. The “listed” price is also short of what is owed and thus is not the real price the bank is going to take. This one too is likely on it's way to foreclosure."

First of all, the short sale status should always be disclosed up front in the MLS so that it's not a surprise to the buyer (however, the price reduction could have been the beginning of the short sale), and second, Fathom7's observation that it's on its way to foreclosure is probably very accurate, because if there's a non-distressed property at or near the same list price, it's going to be an easier pick; third, there are plenty of distressed properties in some areas, but maybe not in the ones you want.

Distressed properties may be ranging from 1.5% of the market up to a 33% or more, in different areas.

Market samples:

Zip code 90803 (Bluff Park, Belmont Shore, Belmont Heights, Naples) - Single family: 5 properties listed as short pay and/or pre-foreclosure, out of 109 single family listings, or 5.5% of the MLS listings are distressed. Condos: 6 properties listed as short pay/NOD (notice of default), out of a total of 55 listings, or about 11% are distressed condos.

Zip code 90802 (downtown Long Beach, Alamitos Beach) - Single family: 8 properties listed in short pay and/or NOD, out of 19 houses, or 42% are distressed. Condos: 36 short pay properties, an additional 6 also as pre-foreclosure, are listed out of 278 condos, or about 15% are distressed properties. (This zip code has a higher percentage of multi-unit housing compared to other areas in Long Beach.)

Zip code 90807 (California Heights, Bixby Knolls and adjacent areas) - Single family: 26 short pay/NOD properties out of 115 houses, or approximately 23% of houses are distressed listings. Condos - About 14 short pay/NODs out of 42 listings, or 33% are distressed condos.

Zip code 90814 - (Bluff Heights, part of Belmont Heights, Carroll Park, Rose Park South) - Single family: About 7 out of 45 MLS listings are short pay/NOD listings, or 16%. Condos - 1 short pay/NOD listing out of 39, or less than 1.5% is a distressed property.

Long Beach - There are a total 1158 single family listings (including the above zip codes) for the entire city in the MLS, 291 are listed as short pays, or 25% are distressed listings.

Huntington Beach - For the entire city, 462 single family homes are listed, 67 are short pays, about 15% of the total market -- this is spread across 4 zip code areas, where some zips may have a higher percentage. Condos - 256 listings, 27 listed as short pays, about 11% of all condo listings.

Cerritos - 90703 zip code - Single family: 112 listings of which 25 are short pay, or 22% are distressed listings; 26 condo listings, 5 are short pays, about 19% are distressed listings.

'Voice this!

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