The Palos Verdes Foreclosure Market

There’s been so much talk in the last couple of years about foreclosures I thought everyone would be interested in knowing what exactly the bank owned market looks like for Palos Verdes real estate.

Jed Smith, the Managing Director of Quantitative Research for the National Association of Realtors, reported on November 1st of this year that, “…The press has been publicizing the potential for continued declines in the real estate markets. However, approximately three years’ worth of data indicates that distressed sales have leveled off in the 30 to 35 percent range in the real estate markets. This suggests that financial institutions are feeding the properties into the market on a relatively constant basis, and given current economic conditions no great surge of shadow inventories has appeared. The good news is that the markets are clearing the properties and that additional price pressures from a surge of shadow inventories does not appear likely. The bad news is that the problem appears likely to be with us for the next two to three years, suggesting that future price appreciation may be slow…” As you can see by the map I attached, there are quite a few Palos Verdes bank owned homes but as a percentage of the total number of households here on the Palos Verdes Peninsula, it doesn’t come close to the same percentage as exists nationally, so our “shadow inventory” picture is not nearly as dire.

There is a corollary to the age old #1 rule of real estate “Location, Location, Location”, and that is “All Real Estate is Local”. Meaning, what is happening nationally, may not be true in your local market. For example, a leading foreclosure research company reported this month that, “…one in every 563 U.S. housing units experienced a foreclosure filing during the month…” This was reported for the month of October. It was reported in that article that as a percentage, that represented about 0.1776% for the national market. But for Palos Verdes real estate, the percentage is a mere a 0.0864%, or in other words, nationally, the foreclosure activity is more than double what it is we find for Palos Verdes homes.  The above map shows those homes that had filings in the month of October, 2011 and below you can see how the Palos Verdes real estate foreclosure market compares to the national market

Sometimes it’s important to put things in perspective.