According to the latest numbers from Mortgage Bankers' Association, 9% of all Americans with a home mortgage are either in delinquent or in default on their mortgages.
The effect is being felt in record number of foreclosures and also in bank failures, and now the U.S. Government is planning on taking over Fannie Mae and Freddie Mac. Fannie and Freddie are government sponsored entities which, between the two of them, own or guarantee nearly one-half of the approximately $12 trillion in mortgages in the U.S.
In July 2008, Orange County ranked 35 of the 56 counties in California in terms of foreclosures with 2206 notice of defaults filed and 2128 notice of trustee sales.
Where will all of this end? Are we going to start to see an improvement?
Though there was a slight decrease in NODs filed in July, some believe that this is a result of Countrywide not filing as many during their integration with BofA. We'll have to wait another month or two to see.
Additionally, there are still many two and three year fixed adjustable mortgages scheduled to reset in the next year or two. When this happens, and the teaser rates that have been in effect no longer are, there are likely to be many more homeowners who cannot afford their new payment, potentially fueling the foreclosure fire.
However, despite all of this negative news in the housing industry, there is some potentially good news. In Costa Mesa in August 2008, 61 homes sold compared to only 40 homes in August 2007. Though this might indicate that the market is beginning to recover as more homes are selling, it is also important to note that in August 2008, the median price of homes sold was $485,000 while in August 2007 it was $640,000.
This is a whopping 24% decrease in median values with potentially a corresponding increase in the number of homes sold of over 50%. See the following links for more information on Costa Mesa Real Estate and Costa Mesa Real Estate Values.
With this decrease in price has come a corresponding increase in the number of people who can afford to buy a home. According to CAR (California Association of Realtors) in the second quarter of 2006, only 23% of first time home buyers could afford to buy a median priced home in California. By the first quarter of 2008, this had increased to an incredible 44%.
So in answer to the question of where it will stop, perhaps as the number of mortgages that are to reset decreases and the affordability index for first time buyers increases, hopefully we will see the market start to see some stabilization.
Interested in taking advantage of the current values in Orange County, click Find an Orange County Home to begin your search.
Information obtained from several sources, including but not limited to: CAR, Dataquick, SoCAl MLS. Information deemed reliable but not guaranteed.
Please contact me at christine@donovanblatt.com for additional information on Costa Mesa Homes.
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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.
Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? For more information see Options to Foreclosures, understanding short sales or contact me at christine@donovanblatt.com to discuss your options.
If you want to buy a home or to list your property for sale, please click Newport Beach homes, Costa Mesa homes, Huntington Beach homes or Orange County homes. Click the link if you are interested in buying a home at a courthouse auction sale.
Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.
Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.
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