Here’s an eye-popping statistic: 17.9 million vacant homes in the USA.
Using a little back-of-the-envelope math we can multiply 17.9 million by about 2.5 people per house and get 44.8 million people. That’s the number of people who could be housed in those vacant homes. To put it in perspective, that’s room for the entire population of Spain or 1.5 times the population of Canada.
You also might be wondering just how that number — 17.9 million — compares to the total number of homes in the USA. Using our 2.5 people her house estimate, combined with the population of the USA — about 301.14 million — we estimate that about 12.9% all homes in the USA are currently vacant. And that number is rising. What would be interesting would be to see how that number compares to history and to comparable countries and their histories. Anyone want to get on that? And perhaps post the info in the comments to this post? Thanks. Cheers!
California home foreclosures again set a record
The third quarter’s total surpasses 24,000, which is a record. ‘It’s working its way to the Westside,’ an agent says.
By Peter Y. Hong
Los Angeles Times Staff Writer
October 27, 2007
Californians lost their homes to foreclosure in record numbers for a second straight quarter, and the trend is creeping into affluent communities, figures released Friday show.
Foreclosures statewide hit a new high of 24,209, besting the previous record by 39%, according to DataQuick Information Systems. Default notices — the first step toward foreclosure — rose to 72,571 for the three months ended Sept. 30, breaking a record set in 1996.
Separately, the Census Bureau reported that the nation’s homeownership rate fell for a fourth straight quarter, the longest decline since 1981. The agency said foreclosures helped push the number of vacant homes to a record 17.9 million.
In California, foreclosures are concentrated largely in outlying areas such as the Inland Empire, the Antelope Valley and the Central Valley, where swarms of people with modest incomes used loans with low “teaser” rates to finance their purchases. But data released Friday show that the pain is spreading to higher-priced neighborhoods in Los Angeles and Orange counties and is even trickling into wealthy communities.
In four Newport Beach-area ZIP Codes, for example, there were 11 foreclosures in the third quarter, up from just three in the same period last year. There were seven foreclosures in Bel-Air, and none a year ago.
“It’s definitely increasing,” said Joyce Essex, a Coldwell Banker real estate agent based in Beverly Hills who specializes in selling foreclosed homes.
Essex said most of her properties were in the San Fernando Valley and South Los Angeles, but about 10% of her listings are now in a more affluent part of town.
“It’s working its way to the Westside. The Westside is always last to get hit,” Essex said of the foreclosure wave, based on her experience in the 1990s downturn.
In the last six months, Essex’s staff has grown from four to 14 to handle the volume of foreclosure work.
In modestly priced neighborhoods, she said, borrowers who are now facing foreclosure had often relied on no-money-down loans and other types of exotic mortgages. When the introductory rates expired, they couldn’t make their payments.
At the high end, Essex said, foreclosure victims tend to be “people who kept pulling money out of their houses, using equity [loans] to pay credit cards, buy cars, go on trips.”
“They used their homes to get cash and kept pulling equity out,” she said.
Laguna Niguel broker Steve DeVre said he had shifted more of his work from sales to foreclosures, including evaluating troubled properties for banks.
“I’ve been barraged in the last 30 days” by foreclosure work, he said.
But John Karevoll, DataQuick’s chief analyst, still sees foreclosure numbers in high-end areas as negligible.
“They are just a smattering,” he said.
The handfuls of foreclosures popping up in areas such as La Cañada Flintridge and Laguna Beach, Karevoll said, may not even be related to the real estate market, tied instead to job loss, divorce or other hardships.
Overall, however, foreclosures are expected to continue escalating as large numbers of variable-rate mortgages reset upward in the next year, leaving homeowners with payments that are higher than they can afford.
That could flood the housing market with discounted, bank-owned homes — possibly stalling a recovery for several years, some analysts say.
Even if the Federal Reserve continues cutting interest rates, “it’s still going to be shocking,” said Edward E. Leamer, director of UCLA’s Anderson Forecast.
According to DataQuick, the third quarter saw a combined 13,314 foreclosures in the seven Southern California counties of Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura. That’s up from 1,960 in the third quarter of last year — an increase of 579%.
Los Angeles County led the way with 3,627 foreclosures, many of those in the Antelope Valley. Riverside was a close second, with 3,462 foreclosures.
In addition, 41,062 Southern California homeowners received notices that they were in default on their loans. About half of such homeowners typically escape foreclosure by bringing their payments current, selling their homes or refinancing, according to DataQuick.
Lower interest rates and easier terms offered by lenders may help some homeowners, but probably not enough to make up for the huge new obligations faced by borrowers who took mortgages with artificially low rates, Leamer said.
Statewide, about half of the default activity was concentrated in the Inland Empire and Central Valley.
The areas with the most default notices had earlier seen torrid gains in property values — rising as high as 34% a year, DataQuick reported.
The mortgage deals driving those high prices proved too good to be true, DataQuick President Marshall Prentice said.
“We know now, in emerging detail, that a lot of these loans shouldn’t have been made,” Prentice said.
In the Inland Empire and Central Valley, foreclosed properties have been selling for about 10% less than other homes in their areas, DataQuick said.
As foreclosures multiply in Los Angeles and Orange counties, it is too early to gauge the effect these properties will have on home values there, said Patrick Veling, president of Real Data Strategies Inc., a Brea real estate consulting firm.
“Is there a tipping point?” he asked. “I don’t know, but we haven’t reached it yet.”
Steven Thomas, president of Re/Max Real Estate Services in Aliso Viejo, expects foreclosures to hurt prices in his area next year.
Foreclosures and short sales — properties offered for less than the outstanding loan amount — account for 10% of Orange County listings, Thomas said. That has kept inventories up now, even though they traditionally fall this time of year.
“We can’t come off those highs [inventories] when we keep getting more bank-owned listings,” he said.
MY OTHER WEB SITES:
MY Stock Picks List (warning/disclaimer):
SUBSCRIBE VIA EMAIL OR RSS:
Like my blog? Want to get automatic updates? Grab the RSS feed or enter your email address at the top right of my blog. It’s free and you can cancel at any time. Enjoy!